11. Suppose you recently broke your arm, and as part of your recovery process, you are considering how many times to go to physical therapy. The marginal cost (MC) of a visit to the physical therapist is constant and equal to $300. That is what you have to pay per visit, assuming you don’t have insurance.

a. How many times should you visit the physical therapist?

b. If you have full health coverage (with no copay or deductible) how many times will you visit the physical therapist?

c. What is the deadweight loss that arises due to full health coverage? (Hint: Deadweight loss is the difference between the willingness to pay and the additional cost of production that arises when the consumer has no copay or deductible.)

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Price $500 (per visit) $400 $300 $200 $100 0 0 2 4 6 8 MC D 10 12 Number of visits