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Why might your consumption of medical services confer some external benefits to the people around you?

Marketing Dec 28, 2020

Why might your consumption of medical services confer some external benefits to the people around you?

Expert Solution

Receiving medical services creates positive externalities, especially when the treatment shortens the time that a person can get another person sick. People who did not receive the treatment get a benefit because they have a lower probability of getting sick.

For example, people who do not get the flu shot have a reduced chance of getting the flu for every person that does receive the flu shot. This is an example of a positive externality because they receive the lower probability of illness despite not taking part in the transaction.

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