Welfare Maximisation

Society’s Welfare is a function of utility derived by individuals of that society with efficient distribution of good. We can get utility possibility frontier from contract curve of consumption. Given these frontier, society will maximise its welfare when highest Isowelfare curve is tangent on its possibility frontier. From this it implies that welfare will be maximized when allocation is efficient. Although, its possible that society may prefer inefficient allocation (b) over efficient allocation (a).