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Draw a graph of the market for vaccines

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Reference no: EM131756375

Demand for childhood vaccines is described by inverse demand P(dp)=30-Q , while supply is described by P(s)=10+Q . There is a positive externality associated with vaccines, such that the extra value is P(dex)=20.

a. Draw a graph of the market for vaccines, making sure to label the private demand, social demand, and supply.

b. On the graph, draw the private market equilibrium, making sure to label the private optimal quantity and price.

c. On the graph, draw the socially optimal equilibrium. Identify the area of deadweight loss associated with private market equilibrium.

Reference no: EM131756375

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