14.2 The optimal stay is still one day. If insurance reimburses $150 per day, then the marginal charge seen by David will be the remaining $150 per day, so he will stay two days. The cost to society of the additional day is $300 and the benefit to David of the extra day is only $225 (the area of the lower shaded figure). The loss in surplus from the additional day’s stay is thus $75.