1. Suppose the market demand function for medical care: Qd= 800 - P and the market supply function for medical care is Qs= -400 + P.

a) Graph the supply and demand functions in the typical manner with price (P) on the Y-axis and quantity of medical care (Q) on the X-axis, showing their intercepts.

b) What is the equilibrium price and quantity? ( show work)

c) Suppose health insurance is provided to all consumers. The insurance policy has a 50% coinsurance rate. Draw the new market demand curve with insurance. Calculate the new equilibrium price and quantity