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Question Completion Status: Figure: External Benefit Price $15 - No 8 SV NI 8 9 10 11 12 13 14 15 Quantity 1 2 3 4 rence Ref

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Answer #1

When economy is facing positive externality, SV curve lies outside the demand curve. As there is positive externality in market, efficient quantity of vaccination is greater than what market is producing.

Efficient quantity is the point when S equals SV, 7 units are produced.

Market quantity is the point when S equals D, 5 units are produced here.

Thus option C is correct.

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