Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price but only through the market forces. Also explain the series of changes that will occur in the market.

Equilibrium price of an essential medicine is too high. Explain what p

1.	Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price but only through the market forces. Also explain the series of changes that will occur in the market.
Answer» <html><body><p></p>Solution :One possibles step can be <a href="https://interviewquestions.tuteehub.com/tag/reduce-1181332" style="font-weight:bold;" target="_blank" title="Click to know more about REDUCE">REDUCE</a> tax on <a href="https://interviewquestions.tuteehub.com/tag/medicine-110" style="font-weight:bold;" target="_blank" title="Click to know more about MEDICINE">MEDICINE</a> (or alternatively give subsidy). This will bring down cost and in turn 'increase' supply. <a href="https://interviewquestions.tuteehub.com/tag/demand-436956" style="font-weight:bold;" target="_blank" title="Click to know more about DEMAND">DEMAND</a> remaining unchanged, a situation of 'excess supply' will emerge which will <a href="https://interviewquestions.tuteehub.com/tag/lead-540361" style="font-weight:bold;" target="_blank" title="Click to know more about LEAD">LEAD</a> to competition between sellers. This will lead to fall in price of the medicine.</body></html>