Efficiency in general equilibrium requires that:
A)the allocation of output between firms is Pareto- optimal.
B)marginal rates of technical substitution are equal for all firms.
C)marginal rates of transformation are equal for all output levels.
D)all MRSs are identical.

Question

Quizplus · Accepted Answer

Efficiency in general equilibrium requires that the marginal rates of technical substitution (MRTS) are equal for all firms, ensuring that resources are optimally allocated in production.

Efficiency in General Equilibrium Requires That