Figure 11-8 Figure 11-8 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 11-8.What is the economically efficient output level?

Question

Figure 11-8  Figure 11-8 shows the market for measles vaccinations, a product whose use generates positive externalities.
-Refer to Figure 11-8.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). This occurs where Q₂ intersects with the vertical line representing MSB. At this level, the total net benefits to society are maximized. Therefore, the best choice is only D, which represents the economically efficient output level.

Figure 11-8 Figure 11-8 Shows the Market for Measles