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Externalities, Merit and Demerit Goods - Coggle Diagram
Externalities, Merit and Demerit Goods
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Costs and Benefits
Private Cost - MPC
The private costs of production, for example, costs of raw materials
External Costs -
The costs on a third party, e.g pollution from production
Social Costs - MSC
Private costs + Social Costs
Private Benefit - MPB
The private benefits from consumption of a good
External Benefit -
The benefit on a third party, e.g healthier lives from vaccine programs
Social Benefit - MSB
Private Benefit + External Benefit
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