-The figure above shows the market for annual influenza immunizations the United States.If the government intervenes in the market and provides a subsidy to providers of immunizations to immunize the efficient number of people,the amount of the subsidy is ________ per person.

Question

Quizplus · Accepted Answer

The subsidy should equal the difference between the marginal social benefit and the marginal private benefit at the efficient quantity. If the efficient quantity is where the marginal social benefit curve intersects the supply curve, and the marginal private benefit is lower by $25, then the subsidy needed is $25 per person.

-The Figure Above Shows the Market for Annual Influenza Immunizations