2. Suppose that the market for Covid-19 vaccines can be represented by the conventional microeconomic model of supply and demand. Show graphically the following elements:

2.1. The market equilibrium in the market for Covid-19 vaccines. (1 mark)

2.2. Suppose the following two events happen simultaneously (note: these two events are completely hypothetical): i) the formula to produce the vaccines is publicly available for other companies to produce them. ii) a recent study shows that there might be severe vaccine side effects for some individuals in the population, but the reasons are still unclear. Show graphically how these two events affect the market outcome. (2 marks)

2.3. Suppose that the demand and supply for Covid-19 vaccines are given by the following equations: = 53.25 1.25 = 12.75 + 0.25 Compute the equilibrium price and quantity exchanged in the market. (2 marks)

2.4. Suppose there is a change in the conditions to produce the vaccines and the new supply curve is: = 15.45 + 0.25 Compute the new equilibrium price and quantity exchanged in the market. (2 marks)

2.5. Suppose that the government would like to make Covid-19 vaccines affordable by adopting a price ceiling in this market. Considering the original equilibrium in this question, what price could be consistent with this policy objective? Explain who wins and who loses with this policy. Show it graphically. (2 marks)

2.6. Compute the price-elasticity of demand (Hint: the slope of the demand curve is simply the value of the vertical intercept divided by the value of the horizontal intercept). (2 marks)