Explain the "information" content of the competitive equilibrium price.

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ls competitive equilibrium efcient? Assumptions: First Fundamental Theorem of Welfare Economics: assume selfish A competitive market equilibrium exists and is a Pareto optimum, if: economic agents independently maximize their private well-being. . Firms and consumers maximize their net benefit: Firms their profit and The price system, if certain assumptions hold, will bring the consumers their utility subject to their budget constraint economy to a Pareto optimal state. , Goods are homogenous Agents are price taker (one interpretation: there are many sellers and buyers). I o No increasing returns to scale. . No externality. . No public goods (3 good that is non-rival and non-excludable) - Costless and free entry and exit