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
Answered by Kira E. Economics tutor

2698 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is deadweight welfare loss and how is it shown on a market failure diagram?


Analyse the level of economic efficiency achieved [short run] in a monopolistically competitive transport market (15 marks)


A new technology revolutionises (e.g. the internet). How will the following changes affect the national economy?


Amazon currently sells 100 000 copies per year of an e-book at $14.99. The company estimates that customers would buy 174 000 copies of the same e-book at a price of $9.99. What is the effect on Price elasticity of Demand and Total


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning