If there is an equilibrium allocation, the agents will
A) remain at the no-trade allocation
B) both voluntarily agree to trade to that allocation
C) agree on one of the allocations through a process of bargaining

Question

Quizplus · Accepted Answer

In an equilibrium allocation, agents will voluntarily agree to trade to that allocation because it represents a situation where both parties can potentially be better off without making anyone worse off, reflecting the principles of Pareto efficiency in economics.

If There Is an Equilibrium Allocation, the Agents Will