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.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 3.12P

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