Answer to Question #165240 in Economics of Enterprise for shahad

Question

Veterinarian scientists discover a vaccine for Bovina Anaemia, a disease that kills 1 in 10 pregnant cows each season. How will this new drug affect the equilibrium price and quantity? Which factor caused the change?

Answer 1

The equilibrium price will increase since there will be additional cost of the vaccine and this will cause the quantity demanded to decrease. The factor that caused the change is the additional cost of the vaccine since the cows have to be vaccinated frequently.