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The inverse demand (AKA private marginal benefit) for a vaccine against a specific disease is given by P=13 - 0.0005Q Where Q is the number
The inverse demand (AKA "private marginal benefit") for a vaccine against a specific disease is given by P=13 - 0.0005Q Where Q is the number of doses/shots given. The supply (AKA "private marginal cost") is horizontal at P=8. In other words, the marginal and average cost of manufacturing the vaccine is constant at $8. The vaccine also creates a positive external benefit in reducing the spread of the disease to others. The Marginal External Benefit is given by: MEB = 7 - 0.00025Q Suppose there is a competitive market for the vaccines. What is the competitive equilibrium quantity? What is the competitive market equilibrium price for vaccines
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