Exchange Optimum

In economics, and especially in microeconomics, a condition in which the distribution of goods among economic subjects is Pareto-optimal is called the exchange optimum (trade optimum ) . This is true precisely when the marginal rate of goods substitution is identical for all economic agents. The curve of the optimum points in a coordinate system is called the contract curve .

example

Party X has 100 apples, Party Y 100 oranges. Provided that the taste preferences are the same, the amount of demand decreases with every consumption. The hundredth apple from X is worth less to X than the first orange from Y, an exchange of 50 apples for oranges, would therefore be of use to both parties, since then both have the greatest possible relative value. The mainspring here is the decreasing limit value. ${\displaystyle Q(P)=a-bP,\quad a,b>0}$

See also

• Production optimum

Individual evidence

1. ↑ Jonas Regul: Value of inferior goods . In: Cengage Learning . Cengage, April 2018.
2. ↑ Winfried Reiss: Microeconomic Theory: Historically sound introduction . 2014.
3. ^ David Friedman: The Economics of Everyday Life . 1996, ISBN 978-0-88730-750-8 .