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over/under consumption/production
- Institution
- OCR
Description of how to set up the over/under consumptionproduction cases
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Market failure refers to when there is a misallocation of resource in a market which results in an equilibriumquantity that leads to a good being over/under consumed/ produced relative to the best allocation for society
Externalities- positive or negative impact on a third party (those who neither buy or sell) from a particular
market transaction
Marginal social cost (MSC)= marginal private cost+ externalities
Marginal social benefit (MSB)= marginal private benefit+ externalities
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