An allocation that has the property that, once the parties reach this point, they have no further incentive to continue trading is known as an equilibrium allocation.

Question

Quizplus · Accepted Answer

This statement is true. An equilibrium allocation is that point where both parties are satisfied with the outcome and have no incentive to continue trading or negotiate further. In other words, it is the point of maximum efficiency in the market where all parties are maximizing their gains.

An Allocation That Has the Property That, Once the Parties