The graph below illustrates the private costs and benefits o.pdf

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The graph below illustrates the private costs and benefits of producing Trisenian, a new miracle drug. a. Draw the MSB and MSC curves on the graph below, assuming that the external benefits are estimated at $40 per unit and the external cost at $20 per unit. Plot only the endpoints of the both curves and position those points on the edges of the graphing area.b. What are the most desirable price and quantity from society's point of view? Price: 5 Quantity: c. If government wanted to increase the quantity to the amount in (b) above, what subsidy would it need to give to producers per unit? Value of subsidy: $ d. If, instead, government wanted to increase the quantity to the amount in (b) above, what subsidy would it need to give to consumers per unit? Value of subsidy: $.

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