why is the social equilibrium preferred to the private equilibrium? you should be able to graphically identify consumer surplus, producer surplus, and total external cost for both the private and social equilibriums.

Demand and supply must balance in a market for there to be a social optimum, which occurs when marginal social benefit equals marginal social cost.

What is social equilibrium ?

A theoretical state of balance in a social system known as "social equilibrium" refers to both an internal balance between related social phenomena and the relationship the system upholds with its surroundings.
When there is a dynamic working equilibrium among a system's interdependent components, it is said to be in social equilibrium. Every subsystem will make adjustments in response to changes in the other subsystems and keep doing so until the equilibrium is maintained.
Only when adjustments are made gradually can equilibrium be reached; otherwise, the social system would fall into disarray, until and until a new equilibrium can be found.
The integration of central place theory with economic geography provides yet another significant illustration of equilibrium analysis in social behaviour. According to the notion, locations will be spread out across the countryside in a fashion that represents a number of urban hierarchies and a number of commercial routes.

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