David’s willingness to pay for hospital recovery time following his upcoming appendectomy is $300 for the first day, $200 for the second, $100 for the third,

$50 for the fourth, and nothing for days beyond four.

(LO2)

a. If David is uninsured and the cost of providing a hospital room is $250 per day, how many days will he stay in the hospital following his operation?

b. How many days would he stay if his insurance covered half the cost of each hospital day?

c. Describe a change in the terms of his insurance policy that would benefit both David and his insurer.