A person's demand for a medical service is given by:

Q = 100 - P

Where P is the out-of-pocket price of the medical service. This person is deciding between the following four insurance options:

Option A: No insurance

Option B: Full insurance

Option C: A plan with 50% coinsurance

Option D: A plan with a $10 copay

a)Calculate the quantity demanded of the medical service under each option A through D if the list price of the service is $50.

b)Which option causes the least amount of moral hazard and why? Which option causes the most amount of moral hazard and why? Your explanations should be one sentence, non-technical explanations (for example, imagine you were explaining this to your grandmother).

c)Using arguments from the article, "The Moral Hazard Myth" (linked above and on Blackboard), explain why the option that causes the least amount of moral hazard or even the second least amount of moral hazard may not be the most desirable option.