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 does D2 represent?

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 does D2 represent?

Quizplus · Accepted Answer

D2 represents the demand curve reflecting social benefit, which takes into account both the private benefit to individuals who receive the vaccination as well as the positive externalities (or spillover effects) that result from their reduced likelihood of infecting others. This curve is shifted to the right compared to the demand curve reflecting only private benefit (D1).

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