Competitive equilibrium e Competitive equilibrium p'∈9 ■ An allocation(x;…x1;y,…y) and price are a competitive(Walrasian) equilibrium Profit maximization y emax py e Utility maximization x∈maxu(x)Mist. pspa+∑9,p∵y ◆ Market clearing ∑x=0+∑功 j=1Competitive 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    = =   = +