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 ▸

What factors affect supply of a good or service?


Can you explain income elasticity of demand?


What are the main tools to used to meet the key economic objective of ecomic growth?


Why does the MC Curve cut the AVC curve at the AVC Curve’s lowest point?