Private and social costs and benefits

• The price mechanism is :: the interaction between demand and supply, and the relationship between them to establish a price equilibrium.

  • However, it deals with private benefits
    • (those for consumers and producers),
      • inc. profit, and satisfaction levels

• Market failure describes how :: the price mechanism fails to consider social costs, called externalities

• negative externalities refer to the adverse effects of production,

  • e.g. the degradation of the environment due to economic activity

• TODO eco topic 3. enviro sust notes ⏫ 📅 2024-08-26