What is the main difference between socially optimal output and actual output in an economy?

Socially optimal output refers to the level of production that maximizes overall happiness and welfare in society, taking into account the benefits and costs involved. This means that when an economy produces at this level, resources are used efficiently, and everyone benefits as much as possible. In contrast, actual output is the level of production that occurs in reality, which may not consider all social costs and benefits, leading to situations like pollution or resource depletion. For example, a factory might produce more goods than is socially optimal, causing harm to the environment and reducing the quality of life for nearby residents. Therefore, the main difference lies in the balance between efficiency for society and the actual market outcomes, which can sometimes be misaligned.