When a market is fully corrected for externalities, it:
A)is equitable.
B)maximizes surplus.
C)makes everyone in society better off.
D)All of these are true.

Question

Quizplus · Accepted Answer

When a market is fully corrected for externalities, it maximizes surplus, which means it allocates resources in the most efficient way possible, maximizing the total benefits received by all parties involved. This does not necessarily mean the market is equitable or makes everyone better off, as those outcomes depend on how the surplus is distributed and other factors beyond efficiency.

When a Market Is Fully Corrected for Externalities, It