Figure 15.6 Figure 15.6 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 15.6.What is the economically efficient output level?

Question

Figure 15.6  Figure 15.6 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 15.6.What is the economically efficient output level?

Quizplus · Accepted Answer

The economically efficient output level is where the marginal social benefit (MSB) equals the marginal social cost (MSC), which occurs at point E. At this level, the quantity demanded is Q₂, which is greater than the quantity supplied at point B, Q₁. Therefore, to reach the economically efficient output level, the quantity supplied must increase to Q₂.

Figure 156 Figure 15