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 theexternal cost at $40 per unit. Plot only the endpoints of the both curves and position those points on the edges of the graphing area.Price240220200180160140120100806040200MSBMSC6 12 18 24 30 36 42 48 54MPCMPBToolsMSBMSCe 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. $[ 40d. If, instead, government wanted to increase the quantity to the amount in (b) above, what subsidy would it need to give to consumersper unit?Value of subsidy: S20024120

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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, 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 Price 240 220 200 180 160 140 120 100 80 60 40 20 0 MSB MSC 6 12 18 24 30 36 42 48 54 MPC MPB Tools MSB MSC 0

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 Price 240 220 200 180 160 140 120 100 80 60 40 20 0 MSB MSC 6 12 18 24 30 36 42 48 54 MPC MPB Tools MSB MSC 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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