Negative Externality Of Smoking
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Negative Externality Of Smoking Moon Kyu Kim
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Negative Externality Of Smoking. Moon Kyu Kim. Video/Images. http://www.youtube.com/watch?v=S0lH4GEFy1o. Market Failure. Negative Externality of consumption. Explanation. - PowerPoint PPT Presentation
Transcript of Negative Externality Of Smoking
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Negative Externality Of
Smoking
Moon Kyu Kim
![Page 3: Negative Externality Of Smoking](https://reader035.fdocuments.us/reader035/viewer/2022081821/56812c25550346895d908f4f/html5/thumbnails/3.jpg)
Market Failure
Negative Externality of consumption
![Page 4: Negative Externality Of Smoking](https://reader035.fdocuments.us/reader035/viewer/2022081821/56812c25550346895d908f4f/html5/thumbnails/4.jpg)
Explanation
• It is negative externality of consumption because smokers ignore the unintended but harmful impact of “passive smoking” on non-smokers.
• It is market failure because free markets are operating without any government intervention, deliver an inefficient or inequitable allocation of resources. If cigarette consumers only consider their own private costs and benefits of consumption, then there will be over consumption of cigarettes. If the negative effects on other consumers is considered the socially desirable level of consumption would be Qs.