Arrange the following steps in the correct order to analyze the effects of government intervention on socially optimal output: A) Evaluate the marginal costs and benefits of the intervention, B) Identify the presence of externalities in the market, C) Determine the actual output level, D) Assess the deadweight loss resulting from the intervention.

To analyze the effects of government intervention on socially optimal output, we start by identifying the presence of externalities in the market. This means we look for any costs or benefits that affect people who are not directly involved in the transaction, like pollution from a factory. Next, we determine the actual output level, which tells us how much is being produced and sold in the market. After that, we evaluate the marginal costs and benefits of the intervention to see if the government’s actions are helping or hurting the situation. Finally, we assess the deadweight loss resulting from the intervention, which helps us understand if there is a loss of economic efficiency because of the government’s actions.