1. The Negative externalities of fast food Consumption By John Hughes

3. Negative externalities of Fast Food Consumption P fm Q fm PMC=SMC PMB

4. Negative externalities of Fast Food Consumption P fm Q fm PsPs QsQs PMC=SMC PMB SMB

5. Explanation As a result of consumption, spillover costs such as increase public healthcare costs are lumped onto third parties (the government) As a result of consumption, spillover costs such as increase public healthcare costs are lumped onto third parties (the government)

6. Explanation The social marginal benefit is less than the private marginal benefit of consumption. This has lead to fast food being over consumed relative to the social optimum The social marginal benefit is less than the private marginal benefit of consumption. This has lead to fast food being over consumed relative to the social optimum

7. Explanation Therefore, fast food goods are underpriced and there will be a negative externality of this over consumption that will result in a dead weight loss of economic welfare, shown by triangle ABC on the graph. Therefore, fast food goods are underpriced and there will be a negative externality of this over consumption that will result in a dead weight loss of economic welfare, shown by triangle ABC on the graph.

8. Dead weight loss to economy as a result of over consumption of fast food P fm Q fm PsPs QsQs PMC=SMC PMB SMB A B C