Assume that the marginal cost (supply)of influenza vaccinations is constant at $40.Assume that everyone in society has health insurance that pays 80% of all medical services,including flu shots.Assume that there are no external benefits associated with these vaccinations.Draw the market demand for flu shots and show graphically what the socially optimal number of flu shots is.Show how many flu shots will be provided in this market given the insurance.Show the deadweight loss caused by the health insurance.
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