Part One (5 points)

Market for COVID 19 Vaccines

Price	Quantity Demanded	Quantity Supplied
0	40,000	0
$5.00	37,500	10,,000
$10.00	20,000	20,000
$15.00	10,000	25,000
$20.00	5,000	39,000
$25.00	1.500	57,000

1. What are the market equilibrium price and market equilibrium quantity for COVID 19 vaccines?

2. At the price of 0, how many COVID 19 vaccines are consumers willing to take?

3. Does a shortage exist at a price of 0? If so, how much is the shortage?

4. Does a surplus exist at a price of $25.00? If so, how much is the surplus?

5. If the government does not want there to be a shortage or surplus, what price should the government allow suppliers to charge for a COVID 19 vaccine?

6. What specific externalities exist in the market for COVID 19 vaccines? Use these externalities to explain why the government would pay for COVID 19 vaccines for all.

7. If a new vaccine is approved, what will happen to the equilibrium price and quantity of vaccines?