Why does excessive consumption of alcohol lead to negative externalities ?

The private consumer does not consider the effect that their excessive alcohol consumption has on a third party and so the private benefit outweighs the social benefit. There is a welfare loss to society from the over consumption and over valuing of alcohol above the socially optimal level. Insert negative externality of consumption diagram

KE

Related Economics A Level answers

All answers ▸

Do only monopolies have monopoly power?


Discuss the view that nationalisation of the railway services in the UK would be beneficial for consumers.


"What are the causes of an appreciation (outward shift of demand) for a floating exchange rate?"


What is Quantitative Easing and evaluate how it impacts an economy?