Editing Pareto efficiency (section)

== Pareto efficiency and equity ==
Although an outcome may be a Pareto improvement, this does not imply that the outcome is equitable. It is possible that inequality persists even after a Pareto improvement. Despite the fact that it is frequently used in conjunction with the idea of Pareto optimality, the term "efficiency" refers to the process of increasing societal productivity.<ref>Nicola. (2013). Efficiency and Equity in Welfare Economics (1st ed. 2013). Springer Berlin Heidelberg : Imprint: Springer.</ref> It is possible for a society to have Pareto efficiency while also have high levels of inequality. Consider the following scenario: there is a pie and three persons; the most equitable way would be to divide the pie into three equal portions. However, if the pie is divided in half and shared between two people, it is considered Pareto efficient{{snd}} meaning that the third person does not lose out (despite the fact that he does not receive a piece of the pie). When making judgments, it is critical to consider a variety of aspects, including social efficiency, overall welfare, and issues such as diminishing marginal value.