Chap003.14 - of consuming the vaccinations. z The market...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
14 Chapter 3 - Supply and Demand: An Introduction Slide 79 Markets and Social Welfare ± Example: Pollution z The market is in equilibrium: MC = MB. z MC however underestimates the cost to society of producing the good. z Therefore, the market produces more than the efficient amount and there is no incentive for producers and consumers to alter their behavior. Chapter 3 - Supply and Demand: An Introduction Slide 80 Markets and Social Welfare ± Example: Vaccinations z The market is in equilibrium: MC = MB. z MB underestimates the benefits to society
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: of consuming the vaccinations. z The market produces less than the efficient amount of vaccinations and there is no incentive for producers and consumers to alter their behavior. Chapter 3 - Supply and Demand: An Introduction Slide 81 Markets and Social Welfare In these markets z Buyers and sellers are behaving rationally z Market equilibrium exists z There are no unexploited opportunities for individuals z Economic surplus is not maximized...
View Full Document

This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

Ask a homework question - tutors are online