Use the table below to answer the following questions.
Table 15.3.1
-Refer to Table 15.3.1.The table shows marginal private benefit and the marginal social benefit from flu vaccinations and the marginal social cost of vaccination production.If production is left to the private market,the quantity produced is
A)1 unit.
B)2 units.
C)3 units.
D)4 units.
E)5 units.

Question

Use the table below to answer the following questions.
Table 15.3.1 
-Refer to Table 15.3.1.The table shows marginal private benefit and the marginal social benefit from flu vaccinations and the marginal social cost of vaccination production.If production is left to the private market,the quantity produced is
A)1 unit. 
B)2 units. 
C)3 units. 
D)4 units. 
E)5 units.

Quizplus · Accepted Answer

To determine the quantity produced by the private market, we need to compare the marginal private benefit (MPB) and marginal social cost (MSC) at each quantity. 
At 1 unit, MPB is 10 and MSC is 12, so the private market would not produce this quantity because the cost exceeds the benefit.
At 2 units, MPB is 8 and MSC is 10, so the private market would produce this quantity because the benefit exceeds the cost. 
At 3 units, MPB is 6 and MSC is 8, so the private market would produce this quantity because the benefit exceeds the cost. 
At 4 units, MPB is 4 and MSC is 6, so the private market would produce this quantity because the benefit exceeds the cost. 
At 5 units, MPB is 2 and MSC is 4, so the private market would not produce this quantity because the benefit is less than the cost.
Therefore, the quantity produced by the private market is 3 units, which is the quantity where MPB equals MSC.

Use the Table Below to Answer the Following Questions