Question

what are the answers to these questions?

Use the graph below to answer questions 5-10. It represents the market for flu-shots, a good that produces a sizable positive externality, | 55 52.5 ។ 50 47.5 45 ។ 42.5 | | 40 37.5 351 32.5 ។ ង 30 | E. 27.5 ។ 25 22.5 + 20 ។ 17.5 ។ 15 12.5 D social 9 2.5 ។ | 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95101010 6. What is the private market equilibrium quantity? 7. What is the socially optimal equilibrium quantity? 8. How much dead weight loss does the private market create? 9. How much dead weight loss does the socially efficient equilibrium create? 10. What subsidy would achieve the socially efficient equilibrium?

Answer 1

6) private market equilibrium quantity = 50

7) social optimal equilibrium quantity = 55

8) DWL at the private market = 0.5*(55-50)*(30-25) = 12.5

9) DWL = 0 at the socially efficient equilibrium

10) Subsidy = $5