Competitive equilibrium o Competitive equilibrium ∈汎 An allocation(x,…xy,…y) and price are a competitive(Walrasian) equilibrium Profit maximization y E max p y Vj Utility maximization x∈maxu1(x)ⅵist.p'x≤p+ x.∈X ∑Qp·y Market clearing >x=O,+2yCompetitive equilibrium Competitive equilibrium: ◼ An allocation and price are a competitive (Walrasian) equilibrium, if:  Profit maximization  Utility maximization  Market clearing 1 1 ( , ; , ) I J x x y y      L p  max j j j y Y y p y j       1 max ( ) . . i J i i i i i ij j x X j x u x i s t p x p p y         =    +    1 1 I J li l lj i j x y    = =   = +