Markets fail to satisfy the conditions of Pareto optimality when:
A)exchanges that would make at least one person better off and no one else worse off go unrealized.
B)exchanges that would produce a more equitable distribution of goods go unrealized.
C)market exchanges allow one party to acquire some of the surplus from the other party.
D)none of the consumers are able to achieve the maximum utility from consumption.

Question

Quizplus · Accepted Answer

Pareto optimality is achieved when no exchange can make at least one person better off and no one else worse off. Hence, when such exchanges go unrealized, it indicates a failure of markets to satisfy the conditions of Pareto optimality. The other options do not directly relate to the conditions of Pareto optimality.

Markets Fail to Satisfy the Conditions of Pareto Optimality When