The Impossibility Theorem implies that once the free market pricing system is abandoned, and there is no way of determining aggregate social preferences.

Question

Quizplus · Accepted Answer

The Impossibility Theorem, also known as Arrow's Impossibility Theorem, states that it is impossible for any voting system to be designed that satisfies a set of desirable criteria. This includes the criterion of unanimous consent, which means that if everyone in a group prefers A over B, then the group as a whole should prefer A over B. This theorem implies that there is no perfect way of determining aggregate social preferences, which is why the free market pricing system is often relied upon as a way of allocating resources efficiently. However, if the free market is abandoned, there is no other mechanism that can accurately capture the preferences of all individuals in society.

The Impossibility Theorem Implies That Once the Free Market Pricing