New answers tagged pareto-efficiency
1
First of all good question. I tried myself on that one, but if any other member of this wonderful site has additional input please also answer :)
In a monopol we know there exists a consumer who would be willing to pay a price for an additional unit of the good that is higher than the additional cost to produce that unit. Possibility of Pareto improvement: ...
2
There are two goods and two consumers, no production. The aggregate endowment is strictly positive. Consumer 1 cares only about the amount of good 1 they consume, with more being better. Similarly for consumer 2 and good 2. Preferences here are continuous and monotone but not strictly monotone. The allocation in which consumer 1 consumes the entire aggregate ...
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