Fundamental theorems of welfare economics

The fundamental theorems of welfare economics are two theorems that explain how different markets make sure that everyone is able to get the goods and services they need in an efficient way. They help us understand how markets work and how to make sure everyone is taken care of.

The first theorem states that in a free market system, the market will find a way to distribute goods and services fairly among buyers and sellers in a way that everyone benefits. This means that everyone gets what they need and people don't have to compete for goods or services.

The second theorem states that if the government steps in and sets prices for goods and services, it will still be possible for everyone to get the goods and services they need. This means that the government can make sure that people can get the things they need even when there isn't enough being sold in the market.

Both theorems help us understand how markets work and how to make sure everyone is taken care of. They can help us figure out ways to make sure that everyone can get the goods and services they need without having to compete for them.