Fundamental theorems of welfare economics
id:
fundamental-theorems-of-welfare-economics-177-3865912
title:
Fundamental theorems of welfare economics
text:
There are two fundamental theorems of welfare economics. The first states that in economic equilibrium, a set of complete markets, with complete information, and in perfect competition, will be Pareto optimal. The requirements for perfect competition are these:
- There are no externalities and each actor has perfect information.
- Firms and consumers take prices as given. The theorem is sometimes seen as an analytical confirmation of Adam Smith's "invisible hand" principle, namely that comp
brand slug:
wiki
category slug:
encyclopedia
description:
Complete, full information, perfectly competitive markets are Pareto efficient
original url:
https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics
date created:
2005-02-10T03:42:10Z
date modified:
2024-09-04T00:17:19Z
main entity:
{"identifier":"Q467205","url":"https://www.wikidata.org/entity/Q467205"}
image:
fields total:
13
integrity:
15