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A consumer's demand for medical service is as follows: 70 1 P Q _ _ E p I where Pp is the out-ofpocket price that
A consumer's demand for medical service is as follows: 70 1 P Q _ _ E p I where Pp is the out-ofpocket price that the consumer faces and Q is the quantity demanded at a particular out-of-pocket price. Say, the medical service has a list price of P1 : $50. i) What would the social loss under a full insurance plan? '5 ii) What would the social loss under a 40% coinsurance insurance plan? $ iii) What would the social loss under a copayment plan with a $10 copay? $
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