Question

This problem illustrates the idea of a competitive equilibrium. Suppose there are only two agents in the economy, whom we will call Ann and Bob. We can think of this as shorthand for an economy that has many Anns and Bobs, so that each is indeed insignificant in the market. The two people have

Answer 1

Solving for above condition will give the competitive price ratio as $\geq \frac{1}{3}$