Answer. a) Fire distinguisher yields benefits on third parties. To a large extend, the benefit of fire distinguisher is private: an individual can put off the fire and save his or her properties. Beyond this benefit, however, fire …
2. Consider the market for fire extinguishers. a. Why might fire extinguishers exhibit positive externalities? b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, the supply curve, and the …
Solved 2. Consider the market for fire extinguishers. a.
a) There is a positive externality associated with an activity when the benefits extend to non market participants. In case of fire extinguishers, prevention of one house from fire helps in im… View the full answer
Fire extinguishers exhibit positive externalities because even though people buy them for their own use , they may prevent fire from damaging the property of others . b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, the supply curve, and the social-cost curve.
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Reference:
https://www.usfa.fema.gov/
https://en.wikipedia.org/wiki/Fire_extinguisher