<p>In the picture below offer curve of individual 1 is given by lines connecting <span class="math-container">$E$</span> to <span class="math-container">$O_1$</span> and <span class="math-container">$O_1$</span> to <span class="math-container">$O_2$</span>. And offer curve of individual 2 is given by lines connecting <span class="math-container">$E$</span> to <span class="math-container">$O_2$</span> and <span class="math-container">$O_2$</span> to <span class="math-container">$A$</span> and <span class="math-container">$A$</span> to <span class="math-container">$O_1$</span>. Set of competitive equilibria are given by the intersection of two offer curves.
<span class="math-container">$p_X = 0$</span> and <span class="math-container">$p_Y = 1$</span> supports allocation at <span class="math-container">$O_2$</span> as competitive equilibrium. Allocations on the line segment <span class="math-container">$O_1A$</span> are supported by prices <span class="math-container">$p_X = 1$</span> and <span class="math-container">$p_Y = 0$</span>.</p>
<p><a href="https://i.sstatic.net/QVvds.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/QVvds.png" alt="" /></a></p>

CC BY-SA 4.0
2021-01-22T13:27:18.853Z
Thank you for your solution. Could you please suggest to me some literature regarding the offer curves so as to find the general equilibrium?
Maybeline Lee
CC BY-SA 4.0
2021-01-22T15:14:13.437Z
Chapter 15 General Equilibrium of Microeconomic Theory by Mascollel, Whinston and Green
Amit
CC BY-SA 4.0
2021-01-22T11:45:40.610Z
2021-01-22T11:45:40.610Z
Amit
<p>I'm having trouble understanding how to find the offer curves in general equilibrium. Is there a general way that we can use to find it?</p>
<p>I can understand the Pareto set and contract curve but when it comes to equilibrium I'm stuck.</p>
<p>For ex. if we have two consumers: Consumer 1 has as his initial bundle all of good <span class="math-container">$2:(0; 10)$</span> ;
while consumer 2 has all of good <span class="math-container">$1 : (10; 0)$</span>.</p>
<p>Let their utilities be
<span class="math-container">$$u_1= min (x; y)$$</span>
<span class="math-container">$$u_2= min (4x; 5y)$$</span></p>
<p>What would be the steps for finding the offer curves? Appreciate any help given.</p>

<microeconomics><general-equilibrium><edgeworth-box>
Offer curves in general equilibrium
Maybeline Lee
# Offer curves in general equilibrium

(Asked by: username_0 on 2021-01-21)

I'm having trouble understanding how to find the offer curves in general equilibrium. Is there a general way that we can use to find it?

I can understand the Pareto set and contract curve but when it comes to equilibrium I'm stuck.

For ex. if we have two consumers: Consumer 1 has as his initial bundle all of good $2:(0; 10)$ ;
while consumer 2 has all of good $1 : (10; 0)$.

Let their utilities be
$$u\_1= min (x; y)$$
$$u\_2= min (4x; 5y)$$

What would be the steps for finding the offer curves? Appreciate any help given.

**Tags:** microeconomics, general-equilibrium, edgeworth-box

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## 1 answers

### Answer by username_1 on 2021-01-22. Score: 2 | Accepted answer

In the picture below offer curve of individual 1 is given by lines connecting $E$ to $O\_1$ and $O\_1$ to $O\_2$. And offer curve of individual 2 is given by lines connecting $E$ to $O\_2$ and $O\_2$ to $A$ and $A$ to $O\_1$. Set of competitive equilibria are given by the intersection of two offer curves.
$p\_X = 0$ and $p\_Y = 1$ supports allocation at $O\_2$ as competitive equilibrium. Allocations on the line segment $O\_1A$ are supported by prices $p\_X = 1$ and $p\_Y = 0$.

[![](https://i.sstatic.net/QVvds.png)](https://i.sstatic.net/QVvds.png)

> **Comments:**
> **username_0**: Thank you for your solution. Could you please suggest to me some literature regarding the offer curves so as to find the general equilibrium?  
> **username_1**: Chapter 15 General Equilibrium of Microeconomic Theory by Mascollel, Whinston and Green  

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