The COVID-19 vaccination program in India illustrates key economic concepts such as positive externalities, public goods, and market failure. Vaccination provides private marginal benefits (PMB), such as personal health protection, but also generates social marginal benefits (SMB) by reducing virus transmission and easing the burden on healthcare systems. The SMB is greater than the PMB because society benefits more from widespread vaccination than individuals do. Without intervention, the market would lead to under-vaccination, as individuals do not account for these external benefits, leading to a socially suboptimal outcome. To address this market failure, government intervention through free or subsidized vaccines ensures that the positive externalities are internalized, aligning private incentives with social benefits. This helps achieve the socially optimal outcome, where the SMB equals the social marginal cost (SMC). By making vaccines widely accessible, the government corrects the under-consumption of vaccines, ensuring public health is maximized and the broader societal benefits are fully realized. Explain this in economic terms and concept using graph and elaborate on policy implications.

The COVID-19 vaccination program in India illustrates key economic concepts such as positive externalities, public goods, and market failure. Vaccination provides private marginal benefits (PMB), such as personal health protection, but also generates social marginal benefits (SMB) by reducing virus transmission and easing the burden on healthcare systems. The SMB is greater than the PMB because society benefits more from widespread vaccination than individuals do. Without intervention, the market would lead to under-vaccination, as individuals do not account for these external benefits, leading to a socially suboptimal outcome. To address this market failure, government intervention through free or subsidized vaccines ensures that the positive externalities are internalized, aligning private incentives with social benefits. This helps achieve the socially optimal outcome, where the SMB equals the social marginal cost (SMC). By making vaccines widely accessible, the government corrects the under-consumption of vaccines, ensuring public health is maximized and the broader societal benefits are fully realized. Explain this in economic terms and concept using graph and elaborate on policy implications.