Positive Externalities of Production as a Market Failure

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Jason Welker

Күн бұрын

Пікірлер: 47

@andrewyu1138 7 жыл бұрын

THANKS FOR FINALLY DRAWING A STRAIGHT LINE

@krishagarwal1844 3 жыл бұрын

will this also be applicable if certain firms bear the cost of the positive externality? Eg - private hospitals getting affected due to the price cap on covid vaccines and hence they are not able to profit and incur losses

@charliebill8442 2 жыл бұрын

why confuzle me like this

@nicolastorres147 Жыл бұрын

A price cap is a different policy from a subsidy. Capping the price of vaccines would reduce the MPB, hence the market quantity would go down, leading to an even more inefficient outcome.

@LeonVanLesProduction 5 жыл бұрын

Great video, helped a lot, great & transparent explanation.

@sadiqurrahman2 3 жыл бұрын

Thanks a lot. I don't have any more language to praise you.

@thisisyoutubetv3235 Жыл бұрын

You have saved me. Thanks for everything ❤

@GloriaAtimYoutubeCoach 3 жыл бұрын

Great video this has help me understand more abt externalities thanks so much for sharing

@reaganmin9463 5 жыл бұрын

Hi, from my understanding, at the quantity Qe, MSC > MPC, and that is how the allocative inefiiency is explained, but you've explained it using MSB > MSC. Are both explanations correct?

@pras2137 5 жыл бұрын

im not sure; but i would lyk to clarify this, Allocative efficiency is achived when MB=MC, in a perfectly competitive market MB=P therefore P=MC is the condition to be satisfyed to achieve allocative efficiency

@piotropoka5997 2 жыл бұрын

Hello, I was taught positive externalities with the method of increasing MB. And there arises some confusion , since in the method I came here with I mean increasing the MB curve Equilibrim price achieved after correction by positive externalities is higher than prior Ep price , and in the method presented in the video it's lower , but in both methods Equilibrium X is going up , what does this difference spring from ?

@ruthmukherjee9937 2 жыл бұрын

Marginal benefit is related to the demand curve basically. Its a postive externality consumption not production And this comment is 9 months old just saw that

@aleksandra199 8 жыл бұрын

Why is the external benefit not on the same line as Qe? It was like that on the negative externality of consumption, how does it change? Which vertical distance is it?

@JasonWelker 8 жыл бұрын

The external benefit is the vertical distance between the MSC and the MPC. Since this is a production externality, the "benefit" is really a "negative external cost". The cost to society is LOWER than the cost to the private producer of the good... the opposite of a cost is a benefit so a "negative cost" is the benefit... Why the MSC is below the MPC.

@aleksandra199 8 жыл бұрын

Thank you :)

@eitren2356 3 жыл бұрын

Thank you for this amazing video!

@histeeiop7680 6 жыл бұрын

lovely real-life example

@chenfanfu2210 9 жыл бұрын

So if government impose tax on sugar to solve obesity crisis, is it a positive externalities from production?

@JasonWelker 9 жыл бұрын

+Chen FanFu No. Government would tax sugar because it creates negative externalities of consumption (obesity). For goods with positive externalities (such as tree farms), subsidies would be the appropriate government response.

@louaybazerbashi9207 9 жыл бұрын

+Jason Welker Dear Jason, what kind of negative externalities will occur on producing sugar? why is it a negative externality?

@JasonWelker 8 жыл бұрын

+Louay Bazerbashi The externalities of sugar result from over-consumption, not production. By contributing to diseases such as obesity and diabetes, individuals who over-consumer sugar are imposing costs on society as a whole: increased strain on the healthcare system, lower productivity in the workplace, etc...

@visualiserbeat6374 7 жыл бұрын

how externalities leads market failure and what is network externality

@visualiserbeat6374 7 жыл бұрын

if the externality is when a decision of someone causes cost or benefit to the individual or group other than the individual who take the decision

@JosephSatoh-em1sl 3 ай бұрын

Nice one

@louaybazerbashi9207 9 жыл бұрын

Thank you this was very helpful!

@lisa-marietamange2957 5 жыл бұрын

Video is amazing and helpful.. Thank you

@SWLee-id6ky 5 жыл бұрын

Thank you so much!! This video was really helpful for me.

@rutujaambre110 6 жыл бұрын

Well explained 👍👍👍

@gglGustav 5 жыл бұрын

Thanks! it was super helpful

@hannahmorton4242 6 жыл бұрын

If the government intervened to increase production, wouldn't that just shift both MPC and MSC up? If the firm produces more, their private cost will increase, but wouldn't this just create a larger gap between MSC and MPC? Would the social cost just stay low and that gap of potential welfare gain increase? I thought the idea was to bring the lines closer together as MPC=MSC is socially optimal, and I understand that concept with Negative externalities, as you want to close the gap so that Social Cost isn't higher. However isn't it a good thing for firms to produce positive externalities? And wouldn't increased production mean that the positive externalities grow instead of shrink? Please help me understand this. I don't get what would happen on the graph if the government intervention to increase production was successful.