The Market for Flu Shots Is Given by the Following

question 13

Multiple Choice

The market for flu shots is given by the following inverse demand and supply equations:
P = 40 - 0.40Q
P = 0.40Q
Where P is the price per flu shot and Q measures the daily quantity of flu shots. The external marginal benefit of a flu shot is $8. The socially optimal number of daily flu shots is:

• A) 60.
• B) 50.
• C) 140.
• D) 35.

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