In a market for handmade leather bags, 50 bags have been sold. For the 51st bag, the producer's cost would be $120, but the highest price any remaining consumer is willing to pay is $110. This market outcome is Pareto inefficient because a potential trade did not occur.
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In a market for handmade leather bags, 50 bags have been sold. For the 51st bag, the producer's cost would be $120, but the highest price any remaining consumer is willing to pay is $110. This market outcome is Pareto inefficient because a potential trade did not occur.
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