How is a potentially efficient change different from a Pareto optimal change?
What will be an ideal response?
For a potentially efficient change, benefits must exceed costs; however, some people can be made worse off as a result. In a Pareto optimal solution, no party is made worse off due to a change.
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What is the major advantage of the corporate form of business organization?
A) Its owners have limited liability. B) Its owners have unlimited liability. C) Its profits are not taxed. D) Its profits are taxed twice.
What is one reason firms might lobby to prevent entry into their market?
A) The long run equilibrium might be characterized by P = MC = ATC. B) The long run equilibrium might be characterized by P = MC < ATC. C) The long run equilibrium might be characterized by P > MC = ATC. D) The long run equilibrium might be characterized by P = MC > ATC.