In an Edgeworth box economy,a competitive equilibrium must lie on the contract curve within the region of mutual advantage.

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In an Edgeworth box economy, the contract curve represents the set of Pareto-efficient allocations, designed to optimize welfare by allowing voluntary exchange between the two consumers. The region of mutual advantage is the area where both consumers are better off by trading with each other. Therefore, a competitive equilibrium, where prices and quantities are determined by market forces, can only be achieved on the contract curve within the region of mutual advantage.

In an Edgeworth Box Economy,a Competitive Equilibrium Must Lie on the Contract