ABSTRACT
In his analysis of price equilibrium A. Marshall created a system of thought which represents one of the most impressive and, at the same time, one of the most unreal of intellectual edifices. Marshall discusses a series of interrelated equilibria: intra-individual equilibrium established according to the code of rational economic behaviour; equilibrium in barter with the distinction between accidental and true equilibrium; temporary equilibrium of demand and supply; normal equilibrium. The real distinction between accidental and true equilibrium is that the latter ‘once hit upon would be adhered to throughout’. The words ‘perfect knowledge of the circumstances of the market’ seem to indicate that Marshall means that a dealer knows all the supply-and-demand schedules of every other dealer. The equilibrium price would not be ‘worked out’ by the play of supply and demand; it would coexist with the market through the realization of stability at a single stroke the moment the market came into existence.
