Maximum social welfare is guaranteed where a competitive firm exhibits the following conditions (where MRPTxy is marginal rate of product transformation of x for y)
1
MRPTxy = \(\frac{\text {price of} ~x(px)}{\text {price of}~y(p y)}\) = \(\frac{\text {marginal cost of x}(MCx)}{\text {marginal cost of y}(MCy)}\)
2
MRPTxy = \(\frac{(px)}{(py)}\) = \(\frac{\text {Total cost of}~x}{\text {Total cost of}~y}\)
3
MRPTxy = \(\frac{(px)}{(py)}\) = \(\frac{\text {Average variable cost of}~x}{\text {Average variable cost of}~y}\)
4
MRPTxy = \(\frac{(px)}{(py)}\) = \(\frac{\text {Total variable cost of}~x}{\text{Total variable cost of}~y}\)