Question

Explain why voluntary transactions improve social welfare.

Short answer

Voluntary transactions benefit both buyers and sellers after the transaction is completed.

Step-by-step solution

Definition

Social Welfare: Social welfare refers to a variety of support programs designed to promote a state's people's overall well-being by providing high-quality care to individuals and society as a whole. A good program investigates the problems of the population first, then proposes answers to the problems revealed in the study dynamics. The government of the United States has a number of programs and policies in place to assist persons who are poor.

Explanation

Voluntary transactions promote societal welfare by allowing sellers and buyers to freely participate in the market. Voluntary transactions allow the consumer's desire to shine through because they have the option to accept or refuse the transaction. Voluntary transactions also give sellers the option to refuse transactions if they so desire. As a result, voluntary transactions boost social welfare by putting both the seller and the buyer in a better position following the transaction.