Consider a firm with a fixed-size production facility as described by its existing cost curves.

a. Explain what would happen to those cost curves if a mandatory health insurance program is imposed on all firms.

b. What would happen to the cost curves if the plan required the firm to provide a health insurance program for each employee worth 10 percent of the employee’s salary?

c. How would that plan compare to one that requires each firm to provide a $100,000 group program that would cover all employees in the firm, no matter what the number of employees was?