The socially optimal outcome is the outcome that:

Question

Quizplus · Accepted Answer

The socially optimal outcome is the outcome that is most efficient for society as a whole, including for buyers, sellers, and bystanders. This outcome takes into account not only the benefits but also the costs, including externalities. Therefore, option A is the correct choice. Option B is incorrect because the socially optimal outcome may not necessarily benefit the largest number of people. Option C is incorrect because an outcome with the most externalities would not be socially optimal. Option D is also incorrect because the benefits of an outcome must be weighed against the costs to determine social optimality.

The Socially Optimal Outcome Is the Outcome That