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 is the economically efficient output level?

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 is the economically efficient output level?

Quizplus · Accepted Answer

The economically efficient output level is where the social marginal benefit (SMB) equals the social marginal cost (SMC), which occurs at point E or Q₂ in the figure. Therefore, the best choice is D.

Figure 5-6 Figure 5-6 Shows the Market for Measles Vaccinations, a Product