00:01
Hey everyone, today we're answering problem number four from chapter 13 of the textbook, which states, the junk buyers company travels from home to home, looking for opportunities to buy items that would otherwise be put out with the garbage, but which the company can resell or recycle, which will be larger, the private or the social benefits.
00:20
So just to review the difference between these two terms, the private benefits are solely the profits that the firm receives, and they're only a portion of the overall social benefits.
00:31
The social benefits include the private benefits that the firm gets, but it also includes all the other positive externalities for the new idea or product that are enjoyed by other companies or society as a whole.
00:46
So in this particular situation, we have the junk buyers company, and they are looking for opportunities to buy items that would otherwise be put out with the garbage.
00:55
So, both the buyer and seller at resale of this, of this garbage would benefit, so that is profit right there, which accounts for our private benefits, but there's also going to be social benefits to what the junkyard company is doing, because it's saving lots of money for households, and city and waste management who's in charge of the disposal companies is also benefiting...