Pareto efficiency (or also Pareto optimality) is an important efficiency concept in economics used to evaluate or compare different allocations of resources, names after Italian economist Vilfredo Pareto (1848–1923). An allocation of resources is Pareto efficient if it cannot be modified to increase the wellbeing of one individual without diminishing the wellbeing of any other individual.

Perfect competition describes a market structure in which many sellers and buyers exchange a homogeneous good and no individual can influence the market price, i.e., buyers and sellers are price takers. In a perfectly competitive market total welfare (that is, the sum of consumer and producer surplus) is maximal.

A price ceiling, also called price cap, is the maximum price that a seller is allowed to charge for a particular good or service by law. It is an instrument of market regulation that governments may use to ensure that firms do not abuse their market power by charging consumers excessively high prices. Particularly, for goods which are considered a necessity such as water, electricity, or food, the government may establish price ceilings to protect consumers.

Price discrimination is a pricing strategy in which firms charge different prices for different units of the same physical good or service, either to different consumers or to the same consumer. By doing so firms can increase their profits compared to selling each unit of the good at the same price. If and how a firm can successfully price discriminate depends crucially on the information that the firm has about its customers and on the possibilities of the consumers to engage in arbitrage.

The price elasticity of demand for an item A ϵA measures how the quantity of the item demanded qA changes in response to a change in the item’s price pA

The price elasticity of supply for an item A ηA measures how the quantity of the item supplied qA changes in response to a change in the item’s price pA

The prisoner's dilemma is a well-known game in non-cooperative game theory that highlights how the individually rational behaviour of 'players' can lead to an outcome that is suboptimal for all involved. It is a game that is often used to analyze the possibility of cooperation in situations where self-interested individuals interact strategically.