When the First Fundamental Theorem of Welfare Economics doesn't hold,there is a market failure.
A) True
B) False
C) Uncertain

Question

Quizplus · Accepted Answer

The First Fundamental Theorem of Welfare Economics states that under certain conditions, competitive markets will reach a Pareto-efficient outcome. If this theorem doesn't hold, then there is a market failure where resources are allocated inefficiently and not towards the Pareto-optimal outcome. Therefore, the best answer is A, true.

When the First Fundamental Theorem of Welfare Economics Doesn't Hold,there