The situation that will lead to a pareto efficient outcome is the presence of positive externalities.
In economics, a pareto efficiency refers to a situation where no economic agent can be made better off without making some other economic agent worse off. It can also be seen as a situation where no individual or preference criterion can be made better off without making at least one individual or preference criterion worse off.
This efficiency happens when an economy has its resources & goods allocated to the maximum level of efficiency and no change can be made without making someone worse off. The efficiency is often measured along the production possibility frontier when graphically depicted, combinations on the PFF representation efficient markets.
In conclusion, most economy are in a Pareto optimum state when no economic changes can make an individual better off without making at least one other individual worse off.
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