12. (10 marks) Physicians In Recent times the government of Australia has tried to regulate the fees charged by physicians in Australia. These policies would inuence physician's behaviour. Considering this situation, use the following three graphs showing the effect of Medicare fees on the physician's incentive to accept Medicare patients. Graph A is a horizontal line that represents the demand curve for Medicare patients. Graph B is a downward sloping curve that represents the demand curve for nonMedicare patients. Graph C represents the sum of demand from the two separate markets. Assume that the physician's marginal cost curve has a positive slope. $ $ DP DM = MRM x x \\ MR}? x Graph A Graph B Graph C (Medicare patients) (non-Medicare patients) (sum of demand) a) How will the physician set the price for non-Medicare patient if physician pursues maximum prot? Explain. (2 marks) b) Under what conditions will the physician not accept Medicare patients? Show graphically. (4 marks) c) Will the physician be more likely to accept Medicare patients if the government increases the Medicare fees paid to the physician? Show the effect of an increased