Detailed explanation

The graph below illustrates the private costs and benefits of producing Trisenian, a new miracle drug. a. Draw the MSB and MSC curves on the graph below, assuming that the external benefits are estimated at $40 per unit and the external cost at $20 per unit. Plot only the endpoints of the both curves and position those points on the edges of the graphing area. MPC MPB 100 Tools MSB MSCA Price 8 8 % % % % % 3 6 9 12 15 18 21 24 27 3033 36 39 4245 Quantity per period 20 10 po e 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 Quantity per period References d. What are the most desirable price and quantity from society's point of view? Prices Quantity Clf government wanted to increase the quantity to the amount in (b) above, what subsidy would it need to give to producers per unit? Value of subsidy d. It instead, government wanted to increase the quantity to the amount in (b) above what subsidy would it need to give to consumers per unit Value of subsidy 5