use the black point (plus symbol) to indicate the market equilibrium quantity. next, use the purple point (diamond symbol) to indicate the socially optimal quantity. Social Cost Market Equilibrium Supply (Private Cost) Socially Optimal Level PRICE OF CARS Demand (Private Value) QUANTITY OF CARS

The intersection of MPB and MPC gives the equilibrium value. The socially optimal quantity is found at the intersection of the marginal private benefit curve and the marginal social cost curve, which is where the market equilibrium quantity is Q* at the equilibrium point E.

The socially optimal quantity is depicted by the point Qs.

What is the connection between peripheral social advantage minimal confidential advantage and minor outside benefit?

A product's marginal social benefit is equal to its private marginal benefit minus its external benefits. This indicates that the unit of production's total marginal utility to society is provided by the marginal social benefit.

Why is the equilibrium of the market not socially beneficial?

A negative externality exists because individuals' actions do not take into account the impact on others. When there is a positive externality, the market produces less of the good or service than is socially optimal because the individual cannot capture the benefit to society.

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