Question

Getting a flu shot reduces the chances of spreading the illness to one's classmates and friends. why, then, is this considered a market failure due to external benefits? because flu shots are priced too high relative to the cost of producing them because the number of people who obtain flu shots is less than the socially optimal quantity because flu shots are not 100% effective because too many people actually get the flu shot

Answer 1

The flu shot is considered a market failure due to external benefits because less than the socially optional quantity of people actually obtain the shot. The flu shot is supposed to make sure that the chances of it being spread are greatly reduced or even eliminated however that can not happen unless people actually receive the shot.

Answer 2

The chances of spreading the flu illness to one’s classmates and friends can be reduce by getting a flu shot but because of the number of people who obtain flu shots is less than the socially optimal quantity it is considered as a market failure due to external benefits.