The Grand Lab has miraculously found a vaccine for the Covid-19 virus. The demand for the vaccine can be divided by high- and low-income groups with the following demand functions: High-income group: QH = 140-20PH Low-income group: QL = 220-40PL where QH is measured in the unit of millions of vaccines demanded by high-income groups at price PH, and QL is the number of vaccines demanded by low-income groups at price PL. Prices in both income groups are measured in USD. The cost of producing the vaccine if given by the following cost function C(QH, QL)= Qh + Q_- a. If the laboratory charges a single price, P7, to everybody, how many vaccines would be sold and to what price? How much profit would the Grand Lab make? b. How many vaccines would be sold to the high- and low-income groups respectively?

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.