Figure 4-20

Figure 4-20 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 4-20.What does D₂ represent?

Question

Figure 4-20
  
Figure 4-20 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 4-20.What does D₂ represent?

Quizplus · Accepted Answer

D₂ represents the demand curve reflecting social benefit. This curve takes into account the positive externalities generated by the use of the measles vaccine, which are not fully captured by the demand curve reflecting private benefit (D₁). The social benefit curve is to the right of the private benefit curve because it reflects the total benefit to society, including the positive externalities.

Figure 4-20 Figure 4-20 Shows the Market for Measles Vaccinations, a Product