The Three Tailors' Tale

  • Reference: ECONE-1-E

  • Publication Date: Sep 25, 2014

  • Source: IESE (España)

  • Type of Document: Exercise

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An island is inhabited by 600 residents. All wear identical clothes, which must undergo repairs once a month. There are two possible economic situations: one based on a custom-driven economy and another based on a competitive equilibrium.


Competitive equilibrium Efficiency Income distribution