Figure 5-1
Figure 5-1 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 5-1.At the market equilibrium,the deadweight loss is equal to

Question

Figure 5-1
  Figure 5-1 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 5-1.At the market equilibrium,the deadweight loss is equal to

Quizplus · Accepted Answer

The deadweight loss is the loss of economic efficiency that occurs when the equilibrium quantity of a good or service is not at the socially optimal level. In this case, the socially optimal level of vaccinations is where the marginal social benefit (MSB) equals the marginal social cost (MSC), which is at the quantity Q1. However, the market equilibrium occurs at the quantity Q2, where the marginal private benefit (MPB) equals the marginal private cost (MPC). The deadweight loss is the area between the MSB curve and the MPB curve, from Q1 to Q2. This area is equal to $500,000. Therefore, the correct answer is C) $500,000.

Figure 5-1 Figure 5-1 Represents the Market for Vaccinations. Vaccinations