1. The market for flu shots during late fall is shown in the following table:

Suppose the community derives a positive externality of $10 for every flu shot administered.
What is the extent of market failure in this situation?
What price and quantity does the market generate, and what price and quantity should it generate to achieve an efficient use of resources?
How can this outcome be obtained?

Transcribed Image Text:

PRICE QUANTITY DEMANDED QUANTITY SUPPLIED $50 1,000 9,000 40 3,000 7,000 30 5,000 5,000 20 7,000 3,000 10 9,000 1,000