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23 April, 12:04

If no externalities exist in a particular industry, what happens to the market equilibrium?

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  1. 23 April, 15:03
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    Market equilibrium does reaches Pareto optimality.

    Explanation:

    If there are no externalities, then we don't have market failure or competitive market equilibrium reaches Pareto optimum. This is a situation, where it is not possible to make things better for someone without making it worse for someone else.
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