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Determine the consumer price-producer price

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Reference no: EM131376103

Suppose the vaccination against virus C is sold in free market, the production of this product doesn't generate external cost but its consumption generates a huge amount of external benefits, if the external benefit per unit of consumption is estimated by $100. If the free market could satisfy 100.000 persons per month at $200 as a market price per unit, but the economic efficiency requires 150.000 vaccinated persons per month.

According to these data and information, explain with suitable graph how government intervention could encourage this market to vaccinate the efficient numbers of individuals determine the consumer price, producer price and the cost of this policy.

Reference no: EM131376103

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