P11.6 Demand Versus Supply Subsidy. In Africa, the continent where the polio epidemic has been most difficult

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P11.6 Demand Versus Supply Subsidy. In Africa, the continent where the polio epidemic has been most difficult to control, international relief efforts aimed at disease eradication often work against a backdrop of civil unrest and war. In some countries, temporary ceasefire agreements must be negotiated to allow vaccination and prevent serious outbreaks from occurring.

During peacetime and during war, low incomes make paying for the vaccine a real problem among the poor. To make the oral polio vaccine more affordable, either consumer purchases (demand) or production (supply) can be subsidized. Consider the following market demand and market supply curves for a generic oral polio vaccine Qq = 24000 — 1600P (Market Demand)

Qs=-2000 + 1000P?

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Managerial Economics

ISBN: 1518

14th Revised Edition

Authors: Mark Hirschey

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