Consider the market for elbow surgeries where no one in the market has insured. Demand is represented by Qd = 500 P, and supply is Qs = P + 100 where P is price and Q is the number of elbow surgeries. : 1. Find the market equilibrium when no one in the market has insurance. [5] 2. Suppose everyone enrolls in an insurance program where there is a coinsurance rate of 45

(a) Sketch the supply curve, the demand curve without insurance, and the demand curve with insurance on a single graph. (b) Find the new market equilibrium.