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.The efficient equilibrium quantity is ________ thousand vaccinations.

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.The efficient equilibrium quantity is ________ thousand vaccinations.

Quizplus · Accepted Answer

The efficient equilibrium quantity is where the marginal social benefit (MSB) intersects the marginal cost (MC) curve, which is at 300 thousand vaccinations. At this quantity, the marginal private benefit (MPB) is less than the MSB, indicating positive externalities. Therefore, the socially optimal quantity is higher than the market equilibrium quantity of 200 thousand vaccinations, and the government or other actors may need to intervene to increase vaccination rates to the efficient level.

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