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.

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Definitions:

Forcing

A conflict resolution strategy that involves pushing one's viewpoint at the expense of others, often disregarding the concerns and rights of other parties.

High-Performing Organizations

Organizations that consistently outperform their peers over time due to effective management, strong cultures, and high employee engagement.

Successful Individuals

People who have achieved their goals or attained prosperity and respect in their field or personal life.

Compromising Style

A conflict resolution approach where parties aim to find a middle ground, making concessions to achieve mutual benefits.