Consider the following discrete application of a market for a dangerous product. Suppose there are two consumers {A, B} who derive benefits from consuming one unit of a dangerous product. Consumer A derives a benefit of $200, while consumer B derives a benefit of $100. The probability of an accident from consuming this product is 0.01, and the harm from an accident is $5,000. A firm’s marginal cost of producing the dangerous product is constant at $75 and the market is perfectly competitive.