### Understanding the Market for Flu VaccinationsThe market for seasonal flu shots is depicted in the accompanying graph. As more individuals receive flu shots, fewer people contract the flu and potentially pass it on to others. This results in a decreased likelihood of catching the flu for everyone, including those who do not get vaccinated. This scenario represents a positive externality.### Graph Details#### Axes- **Vertical Axis**: Price ($)- **Horizontal Axis**: Quantity of flu shots#### Curves- **D1 (Marginal Private Benefit)**: This curve reflects the private demand for flu vaccinations, showing the individual benefit people receive from getting a flu shot. - **D2 (Marginal Social Benefit)**: This curve represents the social demand, considering the external benefit to society when an individual gets vaccinated. It lies above D1, indicating the additional social benefits not accounted for in the private demand.- **Supply Curve**: The supply curve is labeled "supply" and shows the relationship between the price and the quantity of flu shots supplied in the market.### Task- **Social Demand Curve**: Construct the social demand curve (D2) by placing the endpoints at the proper locations on the graph.- **Dead Weight Loss (DWL) Triangle**: Identify the dead weight loss to society by positioning the DWL triangle in the correct area on the graph, illustrating the lost potential gains from not operating at the socially optimal quantity of flu shots.This analysis helps visualize the inefficiencies in the market when social benefits are not fully considered, emphasizing the importance of interventions or policies to align private incentives with social welfare.

Answered: potentially pass it on to others.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If positive externalities exist in a market, then OSocial cost is greater than private cost OSocial cost is equal to private cost OSocial cost is lower than private cost
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Note:The solution should not be hand written.
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MC Qu. 04-173 Refer to the provided graph. Suppose... Price 0 Quantity S Refer to the provided graph. Suppose consumers do not fully appreciate the benefits of the product whose market is shown in the graph. If an external agency is able to provide full information to consumers about the benefits of the product, then
Parks confer many external benefits on society: open space, trees that reduce pollution, and so on. Therefore, the market equilibrium quantity of parks is not equal to the socially optimal quantity. The following graph shows the demand for parks (their private value), the supply of parks (the private cost of producing them), and the social value of parks, including both the private value and external benefits. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.

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