Final answer:
The government provides a subsidy in the form of a voucher to Medicare beneficiaries, enabling them to access vaccinations at a lower cost, thus increasing the socially optimal quantity of vaccinations.
Step-by-step explanation:
To facilitate greater participation in mass pneumococcal pneumonia virus (PPV) and influenza virus vaccination programs, a simplified process involves the government providing a subsidy, such as a voucher, to Medicare beneficiaries. This voucher functions as a form of "income" that individuals can use exclusively to get a flu shot or pneumococcal vaccine. If the amount of the voucher corresponds to the per-unit spillover benefits, it leads to an increase in market equilibrium.
The equilibrium moves to a quantity of Qsocial and a price of Psocial where Marginal Social Benefit (MSB) equals Marginal Social Cost (MSC), creating a more socially optimal quantity of vaccinations. Consequently, suppliers are compensated with the social price per vaccination, while beneficiaries utilize the voucher, effectively only paying a subsidized price, which makes it easier for public health clinics to administer vaccinations to a larger population.