negative externality of smoking
Post on 30-Dec-2015
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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
Negative Externality Of
Smoking
Moon Kyu Kim
Market Failure
Negative Externality of consumption
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.
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