Figure 7-1

Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations.
-Refer to Figure 7-1.Marginal social benefit is represented by which curve?

Question

Figure 7-1
  
Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations.
-Refer to Figure 7-1.Marginal social benefit is represented by which curve?

Quizplus · Accepted Answer

Marginal social benefit is represented by D₂, which is located to the left of the demand curve (D₁) and takes into account the positive externalities (benefits to society) of vaccination. Supply represents the marginal private cost of production, which does not consider the benefits to society beyond the individual receiving the vaccine. Therefore, it does not represent marginal social benefit. While both D₁ and D₂ represent the total benefit to individuals from vaccinations, only D₂ represents the additional benefit to society as a whole.

Figure 7-1 Figure 7-1 Represents the Market for Vaccinations. Vaccinations Are Considered