Suppose That the Marginal Private Benefit of a New Vaccine $M P B = 10 -$

question 19

Multiple Choice

Suppose that the marginal private benefit of a new vaccine could be measured as $M P B = 10 -$ $Q$ . Suppose that the marginal social benefit could be measured as $M S B = 12 - Q$ . Suppose that the private marginal cost curve could be measured as $M P C = Q$ . What amount of a per-unit subsidy would encourage the optimal societal consumption of the vaccine?

• A) \(\$ 1\).
• B) \(\$ 2\).
• C) \(\$ 4\).
• D) \(\$ 6 .\)

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Definitions:

Retail Method

An inventory valuation method used by retailers that estimates inventory value by applying a cost to retail price ratio.

Estimated Cost

An approximation of the cost for goods or services, projected based on current information and past experience.

Retail Method

A pricing strategy used to estimate the value of a store's merchandise by considering the initial cost of inventory and its markup to retail price.

Cost To Retail Price

A pricing strategy where the selling price of an item is determined by adding a margin to its cost.