Demand and Interrelated Markets

Suppose there is an outbreak of a flu virus next month that is larger and more deadly than expected. Answer the following questions in full sentence format.
1. What would happen to the demand for flu vaccines?
2. What further allocation measures other than pricing do you think will occur? In other words, will rationing of this product be just on price like most typical goods or will there be other factors deciding who gets the flu vaccine allocation? Discuss such measures.
3. What would happen to the price and quantity for over the counter cold medicines such as Tylenol if this event occurs? Why?
4. It is important to note that one event can influence multiple markets for goods & services and often in different directions. For example, markets can be impacted from people making lifestyle changes (often temporary but sometimes permanent) as a direct result of a certain event. State three other markets that are likely to have a demand shift because of flu outbreak (note: they do not need to be health care related but certainly can be if you like). For each of the three markets make sure you mention:
1. Which direction you think demand will go.
2. Your reasoning for the shift in demand (how it relates to the deadly flu outbreak).
3. What will happen to the market price and quantity of the good or service described?
4. Your thoughts on the goods’ price elasticity (state whether each good you choose is inelastic/elastic and why).