Question: 2. A pharmaceutical company develops a new at-home test that allows patients to screen for and catch early signs of heart disease. Graph the situation,
2. A pharmaceutical company develops a new at-home test that allows patients to screen for and catch early signs of heart disease. Graph the situation, showing Marginal Private Benefit (MPB), Marginal Social Benefit (MSB), Marginal Private Costs (MPC), and Marginal Social Costs (MSC). Note that in some cases, MPB = MSB (so they would be the same line) or MPC = MSC (so they would be the same line). Identify any third parties that are helped or hurt by transactions in the markets being described. What type of externality is this (positive or negative)? Identify the type of intervention that could lead to a more socially optimal outcome (tax or subsidy). Graph the impact of this intervention. 2. A pharmaceutical company develops a new at-home test that allows patients to screen for and catch early signs of heart disease. Graph the situation, showing Marginal Private Benefit (MPB), Marginal Social Benefit (MSB), Marginal Private Costs (MPC), and Marginal Social Costs (MSC). Note that in some cases, MPB = MSB (so they would be the same line) or MPC = MSC (so they would be the same line). Identify any third parties that are helped or hurt by transactions in the markets being described. What type of externality is this (positive or negative)? Identify the type of intervention that could lead to a more socially optimal outcome (tax or subsidy). Graph the impact of this intervention
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
