Questions: Equilibrium: Where Supply Meets Demand - End of Chapter Problem When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market. a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines. Market for flu vaccines b. As a result of the decline in available flu vaccines, the equilibrium price should and the

Equilibrium: Where Supply Meets Demand - End of Chapter Problem
When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market.
a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines.

Market for flu vaccines
b. As a result of the decline in available flu vaccines, the equilibrium price should and the

Transcript text: Equilibrium: Where Supply Meets Demand - End of Chapter Problem When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market. a. Shift the appropriate curve or curves to show this dramatic change in the market for flu vaccines. Market for flu vaccines b. As a result of the decline in available flu vaccines, the equilibrium price should equilibrium quantity should $\square$ and the $\square$

Solution

Solution Steps

Step 1: Identify the Impact on Supply

The suspension of the flu vaccine plant's license led to a decrease in the number of flu vaccines available in the market by 48 million doses. This represents a significant reduction in supply.

Step 2: Shift the Supply Curve

To represent the decrease in supply, shift the supply curve (S) to the left. This shift indicates that at every price level, the quantity of flu vaccines available is now lower than before.

Step 3: Determine the New Equilibrium

With the supply curve shifted to the left, the new equilibrium point will be where the new supply curve intersects the demand curve (D). This new intersection point will be at a higher price and a lower quantity compared to the original equilibrium.