If the market demand curve does not capture all of the benefits to society of buying an additional unit of good, then:
A)the market equilibrium will be socially optimal.
B)the market equilibrium will not be efficient.
C)the allocation of resources will be socially optimal.
D)the market will not be in equilibrium.

Question

Quizplus · Accepted Answer

If the supply and demand curves do not capture all of the costs and benefits of producing another unit of output, then the market equilibrium will not be efficient.

If the Market Demand Curve Does Not Capture All of the Benefits