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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 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 $120 per unit and the external cost at $40 per unit. Plot only the endpoints of the both curves and position those points on the edges of the graphing area. MPC MPB 240 Tools 220 200 MS8 MSC 180 160 140 120 100 80 60 40 20 6 12 18 24 30 36 42 48 54 Price b. What are the most desirable price and quantity from society's point of view? Price: $ Quantity. c. If 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. S [ d. If, 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: S
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