Suppose That the Marginal Private Benefit of a New Vaccine $M P B = 10 - Q$

question 33

Multiple Choice

Suppose that the marginal private benefit of a new vaccine could be measured as $M P B = 10 - Q$ . Suppose that the marginal social benefit could be measured as $M S B = 12 - Q$ . Suppose that the private marginal cost curve could be measured as $M P C = Q$ . If there is no subsidy in this market,

• A) society will over-consume this product by 2 units.
• B) society will over-consume this product by 1 unit.
• C) society will under-consume this product by 2 units.
• D) society will under-consume this product by 1 unit.

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