Food Inc

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Food Inc.

Fast food
Negative Externality Graph
Fast food
Negative Externality Graph
The film Food Inc. reveals the truth about the way food is produced today. The film provides countless cases of negative externalities. If a good has a negative externality, then the cost to society is greater than the cost consumer is paying for it. In other words, the marginal social cost exceeds the marginal private cost. Since consumers make a decision based on where their marginal cost equals their marginal benefit, and since they don't take into account the cost of the negative externality, negative externalities result in market inefficiencies unless proper action is taken. Negative externalities from eating unhealthy foods are not easily quantified, as a countless number of interwoven factors come into play. While eating unhealthy food has many negative effects on the body, consuming junk food has a large impact on society and the environment. Not knowing how food is produced these days, can open the gap for diseases to be eaten by mouth. Countless negative externalities occurred throughout the film. For example, in 2001, a large number of meats were contaminated by e coli. As the contaminated meat was manufactured to fast food joints and grocery stores, e coli poisoning began to take many lives. A 2-year-old boy by the name of Kevin ate a hamburger from a fast food restaurant. Hours later, the boy caught e coli 0157:H7 and died a few days later of kidney failure and dehydration. His mother pursued Kevin’s Law, which close down plants that produce contaminated meat.

Fast Food
Negative Externality Graph
Fast Food
Negative Externality Graph

= potential welfare loss
= potential welfare loss

The chart above represents the negative externality fast food has on society as a whole. MSC stands for marginal social cost; MPC is the marginal private cost. The black triangle represents the potential welfare loss or the “external cost”...
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