The result that a competitive equilibrium is economically efficient is often described as the first theorem of Welfare economics-If everyone trades in the competitive marketplace, all mutually beneficial trades will be completed and the resulting equilibrium allocation of resources will be economically efficient. ▣MRS'rc=PcPr=MRSKFC Note:MRS of clothing for food The result that a competitive equilibrium is economically efficient is often described as the first theorem of Welfare economics-If everyone trades in the competitive marketplace, all mutually beneficial trades will be completed and the resulting equilibrium allocation of resources will be economically efficient.  MRSJ FC= PC/PF = MRSK FC Note: MRS of clothing for food