Question

Using an Edgeworth box, illustrate how Theorem 8.5 can fail if strict upper contour sets are convex but $x_i \notin \mathrm{cl} P_i\left(x_i\right)$ for some consumer $i$.

   Using an Edgeworth box, illustrate how Theorem 8.5 can fail if strict upper contour sets are convex but $x_i \notin \mathrm{cl} P_i\left(x_i\right)$ for some consumer $i$.

Competitive Equilibrium: Theory and Applications

Competitive Equilibrium: Theory and Applications

Bryan Ellickson 1st Edition

Chapter 8, Problem 3

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5 states that if the strict upper contour sets of all consumers are convex and $x_i \in \mathrm{cl} P_i\left(x_i\right)$ for all consumers $i$, then a competitive equilibrium exists. Show more…

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Using an Edgeworth box, illustrate how Theorem 8.5 can fail if strict upper contour sets are convex but $x_i \notin \mathrm{cl} P_i\left(x_i\right)$ for some consumer $i$.

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