When two commodities X and Y must be allocated among consumers, a necessary condition for distributive efficiency is that:

Question

TuteeHUB · Accepted Answer

NA

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all firms be price takers.

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all firms minimize cost.

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commodity X must be allocated to the consumers with the largest values of MRSXY

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the marginal rates of substitution MRSXY for all consumers must be equal.

1.	When two commodities X and Y must be allocated among consumers, a necessary condition for distributive efficiency is that:
A.	all firms be price takers.
B.	all firms minimize cost.
C.	commodity X must be allocated to the consumers with the largest values of MRSXY
D.	the marginal rates of substitution MRSXY for all consumers must be equal.
Answer» E.

Discussion