1. 2. 3. 4. Define a competitive market equilibrium in the product market What i

Question

1. 2. 3. 4. Define a competitive market equilibrium in the product market What is the definition of a Pareto efficient outcome? What does the first welfare theorem say about competitive market outcomes? If an outcome is Pareto efficient, does that necessarily mean that it is socially optimal? Describe why a Pareto efficient outcome may not be a "good" outcome for society 5. How does the 2"d welfare theorem address the issue of inequality in market outcomes? 6. Describe 3 situations that may exist in the real world that could lead to "market failure" (a situation that causes a market equilibrium to not be Pareto efficient).

Explanation / Answer

1) A competitive market is a market where there a number of buyers and large number of seller and buying and selling homegenous product. In this market , the law of demand applies on buyers that quantity demanded rise with the fall in price and vice-versa and law of supply is applied on suppliers where quantity supplied is increase with the increase in price and vice-versa. and the equilbruim is attained in this market where quantity demanded is equal to quantity at some price level.

for example.

so, the equilbruim price is $40 because at this price, quantity demanded is equal to quantity supplied . and the equilbruim quantity is 75.

2) and all ) please upload again. its against chegg policy

price quantity demanded quantity supplied 20 100 30 40 75 75 60 60 90 80 30 100

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