General Equilibrium Theory is an economic concept that examines how supply and demand interact across multiple markets simultaneously. It seeks to understand how changes in one market can affect others, leading to a comprehensive view of the economy. This theory helps economists analyze the overall efficiency and stability of markets. The theory was developed by economists like Léon Walras and Vilfredo Pareto, who aimed to explain how various economic agents, such as consumers and firms, reach a state of balance. By studying these interactions, General Equilibrium Theory provides insights into resource allocation and the impact of policy changes on the economy.