Answer Happy

During the COVID-19 pandemic, several companies developed vaccines. Consider the competitive vaccine market for the first few months of the vaccines being available. During this time, supply was perfectly inelastic (the number of vaccines is finite), and the demand curve was a standard shape. Answer the following questions: 1.1 Draw a graph indicating the vaccine market at the start of the vaccine roll out (i.e. with a standard demand curve, and a supply curve that illustrates a perfectly inelastic supply). Mark the equilibrium point as A. 1.2 Using the same graph drawn to answer Question 1.1, indicate what would happen once more vaccines have been shown to be effective against COVID-19 and have been approved by regulatory bodies. Show this by illustrating the shift in the supply curve. Mark the new equilibrium point as B. 1.3 At the beginning of the pandemic, vaccines were only approved for adults. Suppose that regulators have approved vaccines for children and now both adults and children can get vaccinated. Using the same graph drawn to answer Question 1.1 as a starting point, illustrate the shift in the demand curve that this would cause. Mark this new equilibrium point as C. 1.4 Vaccines were funded by the companies themselves, governments, not-for- profit organizations, and private funders. Consider if and how each of these funding types could influence the market clearing price of the vaccines. Justify your answer.