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.

Explanation

One possibles step can be reduce tax on medicine (or alternatively give subsidy). This will bring down cost and in turn 'increase' supply. Demand remaining unchanged, a situation of 'excess supply' will emerge which will lead to competition between sellers. This will lead to fall in price of the medicine.