An Economic Analysis of Check Bounce Cases : In India Check Bounce | Page 14

The graph above shows a marginal social benefit curve (MBsocial), a marginal private benefit curve
(MBprivate), and a marginal social/private cost curve (MC). Since the total benefits derived by the
society from positive externalities is greater than the benefit from derived by a sole individual, the
MBsocial curve lies above MBprivate curve. Qmarket is the quantity produced in the transaction in
question, while the added benefit derived by the society, which is greater than what is derived by a
private consumer which is represented by the triangle formed between both the curves 6 .
A socially efficient outcome is one, where ‘MC’ curve equals ‘MBsocial’ curve, hence Q efficient is
the socially efficient is the socially efficient quantity which must be produced for efficient alloca-
tion of resources. Considering the same reflects the situation of positive externalities arising from
fast track courts for check bounce cases, since the benefit derived by the society on a whole in total-
ity from a case judicially administered is greater than the benefit derived by a sole individual, the
marginal social benefit curve lies above the marginal private benefit curve. The same is so because
the society on a whole shall be benefitted from such an externality in a greater quantum than an in-
dividual 7 .
6
Bimal N. Patel, Ranita Nagar, Hiteshkumar Thakkar, Law and Economics in India: Understanding and practice, Rout -
ledge, 22-Jul-2016, p 168
7
Ibid., p 169