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Production Set: Not satisfying Free Disposal Assumption

Economics Asked by Alexa Thomas on July 8, 2021

I saw the figure which satisfies the free disposal assumption in Mas-Colell, Whinston and Green (1995), but wondering if there is a figure that DOES NOT satisfy the free disposal assumption? Any leads will be great.

Thanks!

One Answer

This is something you can figure out yourself. If you have not yet tried, I encourage you to do so.


Draw any set $H in mathbb{R}^n $. Select any point $x$ of set. Is the set of all points $y$ "under" this point $x$, that is $$ left{yin mathbb{R}^n | y << x right}, $$ a subset of $H$?
If no, free disposal is violated.
If yes, remove any of these points from $H$. The reduced set now violates free disposal.

For a figure of such a set, you can consider the Mercedes logo: enter image description here

Answered by Giskard on July 8, 2021

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