12 The Edgeworth Box Finding The Equilibrium Price

In this video, Revi explores how to find equilibrium relative prices in an Edgeworth box scenario. He begins by reviewing key concepts from the previous lesson, emphasizing the importance of focusing on relative prices rather than absolute ones. Using a hypothetical economy with two individuals trading food (x) and shelter (y), Ravi demonstrates how to solve for equilibrium price using Walras' Law and market clearing conditions. He shows that by setting one price as the numerator, simplifying demands into functions of the relative price, and solving for market clearance, the equilibrium price can be found. Ravi also offers a check by reversing the price assumption, confirming the expected inverse relationship. Subscribe to @AxiomTutoringCourses for more insightful economics tutorials.