externality theory

How Do You Calculate Externality?

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How Do You Calculate Externality? The market surplus at Q1 is equal to (total private benefits – total private costs), in this case, a+b+e. … The social surplus at Q1 is equal to total social benefits – total social costs. … The market surplus at Q2 is equal to area a+b. … The social surplus

What Are Externalities Class 12?

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What Are Externalities Class 12? Externalities refer to the benefits or harms that a firm or an individual causes to another for which they are not paid. For example, river pollution created by an oil refinery has disastrous effects on aquatic life. It reduces the overall welfare of the society and create negative externality. What