this post was submitted on 01 Oct 2023
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[–] Pipoca@lemmy.world 2 points 1 year ago

Allocative efficiency in economics just means that you can't make someone better off without making someone else worse off.

An efficient allocation isn't necessarily equitable.

And the first welfare theorem of economics only claims that the market will produce an allocatively efficient result if its complete, in perfect competition, and everyone has complete information. Which has the obvious problems of those preconditions not matching reality.