Question

What are the assumptions on which the
First fundamental theorem of welfare
economics rests?​

Answer 1

Explanation:

The first theorem of welfare economics is based on the two assumptions: 1. In the economy, all commodities are competitive. The equilibrium in the economy is Pareto efficient.

Answer 2

The first theorem states that a market will tend toward a competitive equilibrium that is weakly Pareto optimal when the market maintains the following two attributes: 1. Complete markets with no transaction costs, and therefore each actor also having perfect information.