From the point of view of maximizing welfare points rationing which gives each consumer some fixed umber of ration points) is better than fixed rationing which permits a consumer to buy only a fixed quantity of each commodity. This is so because the points rationing gives a consumer a wide choice n making his purchases even though his total consume son is restricted. The ration points will replace he money prices. Welfare will be maximized when each consumer purchases commodities in such proportions that the marginal rate of substitution any of one commodity for another will be equal to the ratio of their fixed point prices. The marginal rates of substitution for all consumers must be the same.
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