Edgeworth Box

An Edgeworth Box is a visual tool used in economics to analyze how two people can efficiently divide a set of two goods. Imagine a rectangle representing the total amount of goods available. Inside, each person’s preferences and how they value the goods are shown through indifference curves. The box helps identify all the possible ways they can trade and share the goods so that both end up better off without wasting resources—these are called efficient allocations. It helps illustrate concepts like fairness, negotiation, and market equilibrium in a clear, graphical way.