explain both statements in detail with graphs and examples. "When external benefits exist, maximizing private profits produces less than the social optimum" and "when external costs exist, maximizing private profits produces more than the social optimum".
explain both statements in detail with graphs and examples. "When external benefits exist, maximizing private profits produces less than the social optimum" and "when external costs exist, maximizing private profits produces more than the social optimum".
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 2.5P
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Please explain both statements in detail with graphs and examples.
"When external benefits exist, maximizing private profits produces less than the social optimum" and "when external costs exist, maximizing private profits produces more than the social optimum".
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