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Vaccinations against a communicable disease are provided by a competitive industry. Supply is given by Qs=P and demand by Q=12-2P a) Find the equilibrium price
Vaccinations against a communicable disease are provided by a competitive industry. Supply is given by Qs=P and demand by Q=12-2P a) Find the equilibrium price and quantity. (2 marks) b) Now suppose that vaccinations are covered by a government insurance policy. The policy pays 50% of expenditures. Find the equilibrium price and quantity in the presence of this insurance program. (4 marks) c) Calculate the deadweight loss induced by the insurance program, assuming the market outcome in the absence of insurance is efficient. (4 marks)
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