Explain why moving from the market equilibrium to the social equilibrium achieves social efficiency but does not remove the externality. In answering this question you must incorporate definitions and interpretations of the appropriate concepts to demonstrate understanding. Remember, a graph is not an explanation but the representation of an explanation.
Explain why moving from the market equilibrium to the social equilibrium achieves social efficiency but does not remove the externality. In answering this question you must incorporate definitions and interpretations of the appropriate concepts to demonstrate understanding. Remember, a graph is not an explanation but the representation of an explanation.
Chapter3: Economic Decision Makers
Section: Chapter Questions
Problem 3.12P
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