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Author Question: Positive and Negative ExternalitiesThe graph shows the market for flu shots. Assume that P1=$2.00, ... (Read 164 times)

jacob816

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Positive and Negative Externalities

The graph shows the market for flu shots.
 

Assume that P1=$2.00, P2=$2.50, P3=$5.75, P4=$8.00, P5=$9.75, P6=$10.50, P7=$12.75, Q1=160, and Q2=425 and that D1 represents the marginal private benefit of flu shots and D2 represents the marginal social benefit of flu shots. At the efficient equilibrium, ________ flu shots are sold at a price of ________. If the government determines that flu shots create a positive externality, it can ________ (tax/subsidize) flu shots by an amount equal to ________, meaning consumers pay a price of ________.
◦ 425, $8.00, tax, $5.50, $11.25
◦ 160, $5.75, subsidize, $4.00, $5.75
◦ 425, $8.00, subsidize, $5.50, $2.50
◦ 160, $5.75, tax, $4.00, $13.75


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Marked as best answer by jacob816 on Nov 23, 2022

hiyayyay

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jacob816

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Reply 2 on: Nov 23, 2022
Gracias!


kilada

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Reply 3 on: Yesterday
Excellent

 

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