Q2: Consider two vaccines for different viruses x and .0. Assume that the marginal cost of producing both drugs is constant and that the xed cost is small. In other words, assume that the supply curve for both drugs is at. c (a) Suppose that demand for vaccine 7; is price elastic, whereas demand for vaccine ('2 is relatively inelastic. Plot the private demand curve for both drugs on separate axes. o (b) For the sake of example, assume that both viruses have the same externality. Plot the social demand curve for both drugs and label the social loss in each case. 1