-The above figure depicts the Edgeworth box for two individuals,Al and Bruce.Considering only the labeled points,point c is a possible equilibrium

Question

Quizplus · Accepted Answer

In an Edgeworth box, a point can be a possible equilibrium if it is Pareto efficient and if there is a redistribution from the endowment point that makes both parties at least as well off as they were at the endowment. Point c can be a possible equilibrium if either point a or b is the endowment because moving from either of these points to point c could potentially make both Al and Bruce better off or at least not worse off, assuming appropriate compensation or trades between them.

-The Above Figure Depicts the Edgeworth Box for Two Individuals,Al