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3. A small town has only one doctor. He charges a rich person twice as much as a poor person for a similar consultation. a)

3. A small town has only one doctor. He charges a rich person twice as much as a poor person for a similar consultation. a) How does this pricing policy relate to the price elasticity of demand? Are resources being used efficiently? Explain. b) Suppose now that the doctor charges everyone the maximum price they would be willing to pay. What happens to consumer surplus? Will resources the allocated efficiently in this case? Explain and illustrate your answer with a grap

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