Positive Externality Diagram Maker
Vaccinations, education, public transport, positive externality diagrams appear across IB Paper 1 and endless IA articles. The logic mirrors negative externalities but flipped: marginal social benefit sits above marginal private benefit, the market underconsumes, and government subsidies push output toward the social optimum.
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Generate the whole diagram with AI or assemble it from templates, with the welfare loss triangle and subsidy shift drawn precisely where they belong.
What the positive externality diagram shows
A positive consumption externality diagram (e.g. vaccination) shows:
- MPB curve: the market demand curve, benefits captured by the individual consumer.
- MSB curve: above MPB; the gap is the external benefit enjoyed by third parties (herd immunity, a more educated workforce).
- Market equilibrium (Q₁): where MPB meets supply (MSC), the free market underconsumes.
- Social optimum (Q*): where MSB meets MSC, at a higher quantity than the market delivers.
- Welfare loss: the triangle between MSB and MSC from Q₁ to Q*, representing the forgone net benefit.
How to draw it in IB EconGraph AI
- Ask the AI for "positive consumption externality of vaccines with welfare loss" or start with a supply-and-demand template and add a second, higher demand curve labelled MSB.
- Mark Q₁ at MPB = MSC and Q* at MSB = MSC with dotted projection lines.
- Shade the welfare-loss triangle between the two quantities.
- To show a subsidy, shift the supply curve down (or MPB up for demand-side policies like advertising) and mark the new equilibrium.
- Add a caption tying the diagram to the specific merit good you're analysing.
IA & exam tips
- State explicitly on the diagram which curves diverge, the IB rewards "MSB > MPB at every quantity" style annotations.
- Pair the diagram with the subsidy diagram when your article covers government support for merit goods.
- Evaluation gold: does the subsidy close the whole MPB–MSB gap? Draw a partial shift and discuss.
Frequently asked questions
What is the difference between production and consumption positive externalities?
Production ones (e.g. R&D spillovers) diverge the cost curves (MSC below MPC); consumption ones (e.g. education) diverge the benefit curves (MSB above MPB). The AI handles both if you name the case.
Can I show government subsidies on the same diagram?
Yes, duplicate and shift the supply curve downward by the subsidy, then mark the new quantity against Q*.
Do I need an account?
No. The editor, templates, AI with your own key, and full-quality exports all work without signing in.
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