Economics problem set questions

Attachment previewSuppose the supply curve for cans of soda in your dorm is given by P = 2 + 0.01Q, where P is price and Q is the number of cans sold per day. The demand curve for cans of soda in the dorm is given by P = 17 – 0.02Q. Each soda can imposes $0.90 in costs on society because they become litter or must be thrown away or recycled.

a. Find the market equilibrium quantity of soda cans.
b. What is the socially optimal number of soda cans for the dorm?
c. Calculate deadweight loss at the market equilibrium.
d. What amount of tax on soda will ensure that the socially optimal number of cans is consumed?

2. Suppose supply and demand for flu vaccines is given by the following equations, and that since each vaccine also decreases the risk of an outbreak, there exists an external benefit to society of $50 per vaccine.
Demand: P = 800 – 3Q
Supply: P = 100 + 2Q
a. Find the market equilibrium price and quantity of vaccines.