Flu Shots Provide a Positive Externality

question 150

Multiple Choice

Flu shots provide a positive externality. Suppose that the market for vaccinations is perfectly competitive. Without government intervention in the vaccination market, which of the following statements is correct?

• A)At the current output level, the marginal social cost exceeds the marginal private cost.
• B)The current output level is inefficiently high.
• C)A per-shot tax could turn an inefficient situation into an efficient one.
• D)At the current output level, the marginal social benefit exceeds the marginal private benefit.

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