In the absence of externalities, total social surplus equals total private surplus.

Name: In the absence of externalities, total social surplus equals total private surplus.
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Question

Quizplus · Accepted Answer

In the absence of externalities, total social surplus (the sum of consumer surplus and producer surplus) equals total private surplus because there are no external costs or benefits to consider, making the private valuations of goods or services align with their social valuations.

In the Absence of Externalities, Total Social Surplus Equals Total