[经管营销]Varian_Chapter01_TheMarket.pptVIP

Pareto Efficiency Jill has a close apartment; Jack does not. Jill values the close apartment at $200; Jack would pay $400 for it. Jill could sublet the apartment to Jack for $300. Both gain, so it was Pareto inefficient for Jill to have the close apartment. Pareto Efficiency A Pareto inefficient outcome means there remain unrealized mutual gains-to-trade. Any market outcome that achieves all possible gains-to-trade must be Pareto efficient. Pareto Efficiency Competitive equilibrium: all close apartment renters value them at the market price pe or more all others value close apartments at less