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A Broadway play company can only charge one price for tickets to a given performance of its play. The company manager notices that they earn greater total revenue when they charge a higher ticket price and its theater is three-quarters full than when they charge a lower ticket price and the theater is completely full.It follows that demand for this play is
Pareto Optimal Allocations
A situation where no reallocation can make someone better off without making someone else worse off, named after economist Vilfredo Pareto.
Utility Function
A mathematical representation of a consumer's preference ordering over a set of goods and services. It quantifies the satisfaction or happiness derived from consuming these goods and services.
Trade
The action of buying, selling, or exchanging goods and services between people or entities.
Pareto Optimal Allocation
An allocation of resources in which it is impossible to make any individual better off without making at least one individual worse off, indicative of efficiency in resource distribution.
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