Even if external costs or benefits exist,a private firm will allocate its resources and operate its plant in such a way as to maximize social welfare.

Question

Quizplus · Accepted Answer

Private firms are profit-maximizing entities and will typically only take into account their own costs and benefits when making decisions. They may not consider external costs or benefits that affect society as a whole. Therefore, they may not always operate in a way that maximizes social welfare.

Even If External Costs or Benefits Exist,a Private Firm Will