Question
In: Economics
Consider a pharmaceutical laboratory with the following cost information, where Q represents the number of units...
Consider a pharmaceutical laboratory with the following cost information, where Q represents the number of units of a vaccine: Supply curve or marginal private cost curve (MPC): MPC = 2000+ 4Q.
Whenever a person gets vaccinated, they reduce the risk of suffering from infection for themselves. This is represented by the demand curve or marginal private benefit curve (MPB): MPB = 3000 –6Q.
a) Plot these on a clearly labelled diagram and calculate the equilibrium price and quantity.In addition, whenever a person gets vaccinated, this reduces the risk of others being infected as well.
Suppose the benefits created by this are captured by the following function: Marginal external benefit (MEB): MEB = 5Q.
b) Write out the marginal social benefit (MSB) function and plot this MSB curve on your diagram.
c) Calculate the socially efficient number of vaccine unitsand the marginal social benefit of this number of units and show this on your diagram.
d) Calculate and show on your diagram the deadweight loss from the equilibrium in part a) compared to the equilibrium in part c).
e) With the aid of your diagram, describe and explain two different solutions that could be used to implement the socially efficient quantity of vaccine units.
Solutions
Rahul Sunny answered 7 months agoRelated Solutions
Consider the following information as part of a breakeven analysis: Cost of Production: Number of Units...
Consider the following information as part of a breakeven
analysis:
Cost of Production:
Number of Units
Cost ($)
0
o
700
4,900
Cost of Buying
Number of Units
Cost ($)
0
1,500
700
3,600
What would be the equation for the production cost?
What would be the equation for the buying cost?
What is the breakeven # Unis?
What is the breakeven amout?
If you were only interested in 400 units, which option should
be selected?
If you were only...
Consider the following table of values, where t is the number of minutes and Q (...
Consider the following table of values, where t is the number of
minutes and Q ( t ) is the amount of substance remaining in grams
after t minutes. t 0 1 2 3 4 5 6 7 8 9 10 11 12 Q ( t ) 300 267 238
212 189 168 150 134 119 106 94 84 75
a. What is the initial value of Q ( t ) ?
b. What is the half-life?
c. Construct an...
Consider the following information regarding Pink Tartan Inc. Number of units produced 1,000,000 Total fixed cost &nb
Consider the following information regarding Pink Tartan
Inc.
Number of units
produced
1,000,000
Total fixed
cost
$250,000
Per unit variable
cost
$0.32
Interest on outstanding
debt
$400,000
Per unit selling
price
$3.80
Tax rate = 46%
Pink Tartan Inc. has 1,000,000 shares outstanding currently
selling in the market for $10. The firm is evaluating a new project
that would require an initial investment of $2,400,000.
To raise the additional $2,400,000,
the firm is considering two alternatives: (6)
Debt: sell $2,400,000...
Consider the following information regarding Pink Tartan Inc. Number of units produced 1,000,000 Total fixed cost &nb
Consider the following information regarding Pink Tartan
Inc.
Number of units
produced
1,000,000
Total fixed
cost
$250,000
Per unit variable
cost
$0.32
Interest on outstanding
debt
$400,000
Per unit selling
price
$3.80
Calculate the DOL, DFL, and DCL for Pink Tartan Inc. (4)
If the firm would like to double their EBIT, what percentage
increase in sales would be needed? (3)
Pink Tartan Inc. has 1,000,000 shares outstanding currently
selling in the market for $10. The firm is evaluating a...
For the cost and price functions below, find (a) the number, q, of units that produces...
For the cost and price functions below, find
(a) the number, q, of units that produces maximum
profit;
(b) the price, p, in dollars per unit that produces maximum
profit; and
(c) the maximum profit, P, in dollars.
C(q)=100+20qe^-0.01q ; p=60e^-0.01q
(a) The number, q, of units that produces maximum profit is
$__
(Do not round until the final answer. Then round to the nearest
whole number as needed.)
(b) The price, p, per unit that produces maximum profit is...
Consider the probability distribution of the discrete random vector [Χ,Y ] where Χ represents the number...
Consider the probability distribution of the discrete random
vector [Χ,Y ] where Χ represents the
number of orders for chickens in August at neighbouring supermarket
and Y represents the number
of orders in September. The joint distribution is shown in the
following table:
6
Χ
Y 100 200 300 400 500
100 0.06 0.05 0.05 0.01 0.01
200 0.07 0.05 0.01 0.01 0.01
300 0.05 0.10 0.10 0.05 0.05
400 0.05 0.02 0.01 0.01 0.03
500 0.05 0.06 0.05 0.01...
Suppose that output q represents the number of products produced,K is the number of machines used,...
Suppose that output q represents the number of products
produced,K is the number of machines used, and L the number of
workers used. To produce one unit of q, one must can use 1 machine
OR 4 workers. The cost of a unit of K is r= 100, and the cost of a
unit of L is w= 20:First, draw the isoquant for q= 10. Next, draw
the isocost line for C= $2000.Using your isocost-isoquant diagram,
identify the cost-minimizing number...
Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced...
Consider the following information for Presidio Inc.'s most
recent year of operations. Number of units produced 2,600 Number of
units sold 1,600 Sales price per unit $ 650.00 Direct materials per
unit 75.00 Direct labor per unit 105.00 Variable manufacturing
overhead per unit 55.00 Fixed manufacturing overhead per unit
($307,060 ÷ 2,600 units) 118.10 Total variable selling expenses
($10 per unit sold) 16,000.00 Total fixed general and
administrative expenses 76,000.00 Required: 2-a. Complete a full
absorption costing income statement for...
Find the linear regression line for the following table of values, where x represents the number...
Find the linear regression line for the following table of
values, where x represents the number of employees a manager
supervises and y represents average percentage of incomplete tasks.
You will need to use a calculator, spreadsheet, or statistical
software. Round your final answers to two decimal places.
Given the following inventory information… Item number Unit cost Annual usage in units Current inventory in...
Given the following inventory information…
Item number
Unit cost
Annual usage in units
Current inventory in units
B8867
10
100
4500
J1252
5.25
6500
120
K9667
1.22
4000
1000
L2425
12.5
54
254
M4554
5.25
6500
120
T6334
70
500
800
W9856
.75
800
20000
X2215
1.5
8000
2000
Y3214
70
1000
500
Y6339
4
3500
125
which of the following items is not classified as C items by
annual dollar usage?
Which is not classified as C items by...
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