This paper has taken the mixed product, examined its components, and, on the basis of private-public characteristics, defined four categories. These four categories of products have been analyzed through the use of an altered version of the Cicchetti and Smith graphical device. Through this analysis the effects of changes in the various demand components have been isolated. Thus, revised market equilibria have been determined giving indications of social cost or benefit and private cost/benefit. The analytical tool posited here may prove to be useful in isolating the source of externalities. Of course only one side of the market has been analyzed—supply has been passive. But, by now the interested reader should be able to make further adjustments for himself and thereby test the model's reaction to other combinations of change. Policy implications of the analysis have only been alluded to in passing. Thus, there is another work to be done in relating taxes, subsidies, charges, quotas, and property rights to the analysis here. In any event it is hoped that this analysis offers something for the world which is not all “bad” and for the world which is. Copyright Center for Study of Public Choice Virginia Polytechnic Institute and State University 1974
