Micro-Economics

What are the three caveats? 

1) If a market is efficient, it is not necessarily fair. Fairness and equity are often conflicts. Society cares about equity. Government reducing efficiency for equity can be justified
2)  Markets sometimes fail. under some well-defined conditions, markets can fail to deliver efficiency. When this occurs, markets no longer maximize total surplus.
3) Even when the market equilibrium maximizes total surplus, this does not mean that it results in the best outcome for every individual consumer and producer.

Discussion