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In Economics, There Is a Concept Called Pareto Optimality

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Essay

In economics, there is a concept called Pareto optimality. This is the concept whereby parties trade until neither one can be made better-off without making the other worse-off. At that point, both parties are said to have reached a state that is Pareto optimal. Do you think the market for kidneys enjoys Pareto optimality? Why or why not?


Definitions:

Profit-Maximizing

A strategy or goal aimed at achieving the highest possible profit through adjusting production levels, prices, or other factors.

Marginal Revenue

Refers to the additional income generated from selling one more unit of a good or service.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Economic Profit

The discrepancy between gross revenue and comprehensive costs, inclusive of both apparent and implied expenses.

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