The demand function for a drug that cures the common cold is Q = 165 – 0.25P. Its supply is fixed at 100
a. (4 marks) What is the net benefit to the buyers of this drug at the current market price, if any?
b. (4 marks) Now suppose the government’s health care insurance plan covers for the cost of this drug fully for the buyers. What happens to the buyers’ net benefit because of this plan?