In Africa, the continent where the polio epidemic has been mostdifficult to control, international relief efforts aimed at diseaseeradication often work against a backdrop of civil unrest andwar.  In some countries, temporary cease-fire agreementsmust be negotiated to allow vaccination and prevent seriousoutbreaks from occurring.  During peacetime and duringwar, low incomes make paying for the vaccine a real problem amongthe poor.  To make the oral polio vaccine moreaffordable, either consumer purchases (demand) or production(supply) can be subsidized.  Consider the followingmarket demand and market supply curves for a generic oral poliovaccine:

Q_D     =  24,000-2,000P                (MarketDemand)

Q_S     =  -4,000+1,500P                (MarketSupply)

where Q is output measured in doses of oral vaccine (inthousands), and P is the market price in dollars.

1. Find the current equilibrium price and quantity in thismarket.
2. Find the equilibrium price and quantity in this market if thegovernment offers a $7.00 per unit subsidy for providers of thevaccine.

c.   What will happento the price buyers pay per dose of the vaccine as a result of thesubsidy?

d.   What price willproviders actually receive (net price) per dose yard after thesubsidy?

e.   How much will thissubsidy cost the government?

f.    Now supposethe government decides on a different policy. Calculate theequilibrium price/o\

tput solution after the institution ofa voucher system whereby consumers can use a $7.00 voucher tosupplement cash payments.

g.   What will happento the net price buyers pay per dose of the vaccine as a result ofthe vouchers?

h.   What price willproviders actually receive per dose after the vouchers?

i.    How muchwill this system of vouchers cost the government?

j.    Discuss thedifferences in these two approaches to helping solve the polioepidemic.