If the socially optimal level of output for an industry is greater than the equilibrium output for that industry,there are

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When the socially optimal level of output is greater than the equilibrium output, it indicates the presence of external economies. External economies occur when the production or consumption of a good or service has a positive effect on third parties not directly involved in the market transaction, leading to a situation where the social benefit of production is higher than the private benefit. This can result in a lower equilibrium output than what would be socially optimal, as the market does not account for these positive externalities.

If the Socially Optimal Level of Output for an Industry