1. This question considers a single-payer system.

a) Please use a supply and demand graph to illustrate and explain whether the price and quantity of market-clearing medical care are higher or lower under a single-payer system compared with those in a perfect competitive market. (10 points)

b) Under what conditions, a single-payer system can lower the price of medical care, and at the same, does not decrease the amount of medical care provided compared with the amount in a perfect competitive market. (10 points)