Figure 5-6 Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 5-6. What does D2 represent?

Question

Figure 5-6  Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 5-6. What does D2 represent?

Quizplus · Accepted Answer

D2 represents the demand curve reflecting social benefit, which takes into account the positive externalities generated by the use of measles vaccinations. It is higher than the demand curve reflecting private benefit (D1), which only reflects the private benefits received by individuals who are vaccinated. The difference between D1 and D2 represents the positive externalities generated by those who are vaccinated, which benefits society as a whole.

Figure 5-6 Figure 5-6 Shows the Market for Measles