Your consulting firm has been contracted by the government of San Escobar to provide recommendations regarding influenza immunizations. Currently, the government of San Escobar does not intervene in the market for flu immunizations in any way and the market is best characterised as perfect competition. Assume that there is an equal number of older adults (+65 years old) and younger adults (18-22 years old) living in San Escobar. Assume also that each citizen buys their own immunization.

Influenza (the flu) is a highly contagious disease, usually prevented by vaccination and treated by managing symptoms. Spread by body fluids from infected people, symptoms include a runny nose and sore throat. Flu can affect anyone. The same vaccination is given to all age groups and equally effective for each age group.

2A) Juliette, who is one of the consultants on your team, says that the rate of flu immunizations is lower than socially optimal. Explain why you think she made this statement. Use both words and a graph to illustrate your answer. [1pt]

(2B)After doing some research, Daniel reports to you that influenza is especially dangerous for older adults (over 65 years old) and that they are aware of these risks. He also found out that young adults (18-22) interact (face-to-face) with approximately 53 other people each day, while adults over the age of 65 interact (face-to-face) with approximately 5 other people each day. Daniel suspects that this may be relevant for Juliette's comment regarding socially optimal levels of immunizations. In particular, Daniel says that the rate of immunizations among older adults is much more below what is socially optimal than the rate of immunizations among young adults. Do you agree with Daniel? Explain your answer using both graphs and words. [3pt]