Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A study of immunising children in poor countries against diphtheria, pertussis, and tetanus estimated that, in the long run, a 10% increase in the number

A study of immunising children in poor countries against diphtheria, pertussis, and tetanus estimated that, in the long run, a 10% increase in the number of children vaccinated increases the total cost of vaccinations by 8.4%. According to this study,

  1. Is immunisation over this range characterised by economies of scale, constant returns to scale, or diseconomies of scale?
  2. We can define long-run marginal cost (LRMC) as the cost of increasing output by one unit when all inputs can be varied (as they can be in the long run). Based on the study, at current vaccine levels, would LRMC for vaccinations be greater than, less than, or equal to long run average total cost (LRATC)? Why?
  3. If we want to know what it will cost to vaccinate additional children, and we use "cost per vaccine" as given by the current LRATC, do we overestimate, underestimate, or accurately estimate the cost per additional vaccine?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Research Methods for Business A Skill Building Approach

Authors: Uma Sekaran, Roger Bougie

7th edition

978-1-119-2668, 1119165555, 1119165552, 9781119266846, 111926684X, 978-1119165552

Students also viewed these Economics questions

Question

Where do attitudes come from? How do they change?

Answered: 1 week ago