The supply of measles vaccine is given by Q = 450 × P. The demand for measles vaccine is given by Q = 20,000 − 50 × P.

a. What is the market equilibrium price and quantity?

b. The demand curve implies that private willingness to pay is P = 400 − Q/50. However, external benefits are associated with each measles vaccination, so the social demand curve is Q = 20,000 − 50 × (P − 5). What are the equilibrium price and quantity if these external benefits are considered?

c. Propose an intervention that will result in this equilibrium volume.