Flu vaccines often provide both private benefits to individuals and positive external benefits to other members of society.As a result,without government intervention,one would find:
A)too many doses of flu vaccine being produced since external benefits would not be considered.
B)too few doses of flu vaccine being produced since external benefits would not be considered.
C)the optimal amount of doses of flu vaccines being produced since external benefits would not be considered.
D)a shortage of doses of flu vaccine because their marginal social benefit is overestimated.

Question

Quizplus · Accepted Answer

Without government intervention, private producers would only consider the private benefits of producing flu vaccines and not take into account the positive external benefits the vaccines have on other members of society. This would lead to underproduction of vaccines since the marginal social benefit (private benefit plus positive external benefits) would exceed the private benefit alone. Therefore, choice B, too few doses of flu vaccine being produced since external benefits would not be considered, is the best choice.

Flu Vaccines Often Provide Both Private Benefits to Individuals and Positive