If the relative price of quiche is pQ pW 1, what are Kelvin’s and Brooklyn’s excess demands for quiche and wine? Explain why this relative price is not the Walrasian equilibrium price? How should pQ pW adjust to reach the Walrasian equilibrium?
If the relative price of quiche is pQ pW 1, what are Kelvin’s andBrooklyn’s excess demands for quiche and wine? Explain why this relativeprice is not the Walrasian equilibrium price? How should pQ pW adjust toreach the Walrasian equilibrium?