Taxes & subsidie V the efficient outcome in a market without externalities. With externalities, government responses may help the distort market reach a so state. ensuremarket reach a sociall V state. desirable detrimentalIn the market with positive externalities, social benefit private benefit. Therefore, in these markets, socially efficient outcome greater than is privately efficient outcome. smaller than equal to In the market with negative externalities, social cost is private cost. Therefore, in these markets, socially efficient equilibrium outcome is * privately efficient outcome