The First Welfare Theorem holds that the allocation of goods resulting from competitive prices is "efficient," which is the equivalent of "equitable."

Question

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The First Welfare Theorem holds that the allocation of goods resulting from competitive prices is "efficient," but it does not necessarily mean that it is "equitable." Efficiency means that resources are allocated in a way that maximizes overall economic welfare, but it does not take into account whether this allocation is fair or just.

The First Welfare Theorem Holds That the Allocation of Goods