Question
John is an Economics major interested in determining the demand for health care. He decided to survey individuals outsidea doctor's office. Some individuals were on
John is an Economics major interested in determining the demand for health care. He decided to survey individuals outsidea doctor's office. Some individuals were on insuranceplan A and others had insurance plan B, and these insurance contracts had different copayments for visits to the doctor. John found that those with insurance A visited the doctor 6 times a year and those with insurance B visited the doctor 2 times a year.
What is the main reason we cannot use John's estimation to determine the true demand curve for doctor'svisits? How would the true demand curve look like relative to what John estimated? Use a graph as part of your explanation.
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