$50 O $60 O $70 $80 Price (S/dose) AMINNA vaccine is developed to light COVID. The chance for anyone to contract the virus drops as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine. The socially optimal equilibrium price is. 110 100 90 S 80 70 60 50 40 30 20 10 0 0 25 50 D1 D2 75 100 125 150 175 200 225 250 Quantity (doses/day)

Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.

Give an example of a positive externality and an example of a negative externality.

Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. QS1 is the quantity supplied without social costs. QS2 is the quantity supplied with social costs. What is the negative externality in this situation? Identify the equilibrium price and quantity when we account only for private costs, and then when we account for social costs. How does accounting for the externality affect the equilibrium price and quantity?