Negative Externality Of E-Cigarettes
Commentary: friend and family approval of e-cigarettes may boost use among teens (author: James McIntosh)
The article explains how the use of e-cigarettes by adolescents/high school students is increasing because of family and friend approval.
Diagram 1 shows negative externalities of consumption
E-cigarettes are a demerit good (goods that will be over-provided by the market and, because of this, they will be over consumed and that the government thinks are bad both for people who consume them and for society as a whole, and therefore government would like to see them consumed to a lesser degree, or not at all (Blink and Dorton 141)). Cigarettes are a product that adversely affects third parties.
Negative externalities of consumption produced …show more content…
Other than simple discomfort at the smell of cigarette, the costs to others are significant and include lung cancer and asthma, to name just a few. Because there is a free market, consumers will maximize their private utility (benefit) and consume at the level where MSC=MSB; marginal social cost is the total cost to society as a whole for producing one further unit, or taking one further action, in an economy.
A marginal social benefit is a marginal benefit enjoyed by a household (or business) in actually consuming (or producing) a …show more content…
First of all, the government could impose indirect taxes on cigarettes, in order to reduce consumption. If the government imposes an indirect tax, then that will shift the MSC curve upwards to MSC+tax. This will reduce consumption to the socially efficient level of output Q*, but the price to the consumers will be P2. The government will gain significant revenue, which may be used to correct some of the negative externalities caused by teen smoking.
Moreover, the government could provide education about the dangers of smoking and also fund negative advertising in order to reduce demand for cigarettes, thus shifting the MPB curve to the left, inward.
However, the costs of this policy may be high, although if taxes are in place, then the revenue could be used to fund these measures. Also, there is doubt as to the effectiveness of education and advertising in terms of reducing cigarette consumption. Many teenagers seem prepared to accept the dangers of smoking and are little affected by measures to put them off.
In the future, I believe that there are two possibilities that can
The article explains how the use of e-cigarettes by adolescents/high school students is increasing because of family and friend approval.
Diagram 1 shows negative externalities of consumption
E-cigarettes are a demerit good (goods that will be over-provided by the market and, because of this, they will be over consumed and that the government thinks are bad both for people who consume them and for society as a whole, and therefore government would like to see them consumed to a lesser degree, or not at all (Blink and Dorton 141)). Cigarettes are a product that adversely affects third parties.
Negative externalities of consumption produced …show more content…
Other than simple discomfort at the smell of cigarette, the costs to others are significant and include lung cancer and asthma, to name just a few. Because there is a free market, consumers will maximize their private utility (benefit) and consume at the level where MSC=MSB; marginal social cost is the total cost to society as a whole for producing one further unit, or taking one further action, in an economy.
A marginal social benefit is a marginal benefit enjoyed by a household (or business) in actually consuming (or producing) a …show more content…
First of all, the government could impose indirect taxes on cigarettes, in order to reduce consumption. If the government imposes an indirect tax, then that will shift the MSC curve upwards to MSC+tax. This will reduce consumption to the socially efficient level of output Q*, but the price to the consumers will be P2. The government will gain significant revenue, which may be used to correct some of the negative externalities caused by teen smoking.
Moreover, the government could provide education about the dangers of smoking and also fund negative advertising in order to reduce demand for cigarettes, thus shifting the MPB curve to the left, inward.
However, the costs of this policy may be high, although if taxes are in place, then the revenue could be used to fund these measures. Also, there is doubt as to the effectiveness of education and advertising in terms of reducing cigarette consumption. Many teenagers seem prepared to accept the dangers of smoking and are little affected by measures to put them off.
In the future, I believe that there are two possibilities that can