-Vaccinations provide both private benefits and external benefits. The table above gives information on the marginal private benefit and marginal external benefit associated with vaccination against varicella (chicken pox). If the marginal cost of a varicella vaccination is $10, then the unregulated competitive equilibrium will have
A) 2 million vaccinations.
B) 3 million vaccinations.
C) 4 million vaccinations.
D) 5 million vaccinations.

Question

-Vaccinations provide both private benefits and external benefits. The table above gives information on the marginal private benefit and marginal external benefit associated with vaccination against varicella (chicken pox). If the marginal cost of a varicella vaccination is $10, then the unregulated competitive equilibrium will have
A) 2 million vaccinations. 
B) 3 million vaccinations. 
C) 4 million vaccinations. 
D) 5 million vaccinations.

Quizplus · Accepted Answer

The unregulated competitive equilibrium will occur where the marginal private benefit equals the marginal cost. From the table, we can see that this occurs at 3 million vaccinations.

-Vaccinations Provide Both Private Benefits and External Benefits