How would the subsidy affect the number of prescriptions filled?

Q5. The demand for a new prescription drug is given as Qd = 100 P while supply is given by Qs = 3 Show more Q5. The demand for a new prescription drug is given as Qd = 100 P while supply is given by Qs = 3P. a. What is the equilibrium price and quantity? b. The U.S. Government in order to increase access to the drug imposes a price ceiling (the maximum price one can charge) of $20. Is there a shortage or surplus? c. How big? d. Suppose the pharmaceutical company refuses to go along with the plan unless the government compensates them. A new member of congress suggests the government pays the manufacturer a subsidy of $5 for each unit sold at $20. Under this plan how much would the government pay? e. How would the subsidy affect the number of prescriptions filled? f. Is there a shortage? Show less

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