For an equilibrium to be socially optimal,it must be true that ________ to individual participants in the market are the same as those experienced by society as a whole.
A) neither the costs nor the benefits
B) the costs,but not the benefits
C) the benefits,but not the costs
D) both the costs and the benefits
E) the taxes

Question

Quizplus · Accepted Answer

For an equilibrium to be socially optimal, both the costs and the benefits to individual participants must be the same as those experienced by society as a whole. This means that the benefits should outweigh the costs, and all costs and benefits should be taken into account, including externalities that affect parties outside of the market transaction. Thus, choice D is the correct answer.

For an Equilibrium to Be Socially Optimal,it Must Be True