Suppose That Flu Shots Create a Positive Externality Equal to $12

question 233

Multiple Choice

Suppose that flu shots create a positive externality equal to $12 per shot.Further suppose that the government offers a $5 per-shot subsidy to producers.What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?

• A) They are equal.
• B) The equilibrium quantity is greater than the socially optimal quantity.
• C) The equilibrium quantity is less than the socially optimal quantity.
• D) There is not enough information to answer the question.

---

Definitions:

Fe

Symbol for Iron, a chemical element with atomic number 26, known for its strength and magnetic properties.

Electrons

Negatively charged subatomic particles orbiting the nucleus of an atom involved in chemical bonds and electrical conduction.

Atom

The smallest unit of ordinary matter that forms a chemical element, consisting of a nucleus surrounded by electrons.

Co

Co is the chemical symbol for cobalt, a naturally occurring element with atomic number 27, known for its magnetic properties and use in alloys.