ABSTRACT
While classical economists focused on the study of the economy as a whole, Marshall was perhaps the first modern microeconomist.
He introduced the idea that prices and quantities are determined simultaneously by supply and demand.
Léon Walras is considered the father of the neoclassical school of thought for his two main contributions to economic theory: the general equilibrium approach and the introduction of prices as the adjusting variable in markets.
How market equilibrium is attained marks a key difference between the Marshallian and the Walrasian approach. In Marshall’s theory, quantities are the adjusting variable while in the Walrasian model prices play that role.
