N1

Chattanooga has 0.7 per capita visits and $25 OOP costs. Memphis has 0.5 per capita visits and $50 OOP costs.

1a.) What is the price elasticity of demand for wellness visits in Tennessee using this data?

1b.) If per capita incomes are considerably higher in Memphis than in Chattanooga, is the above an overestimate or underestimate of the price elasticity? Show using graphs.

1c.) If population health is overall worse in Chattanooga than Memphis, is the above an over or understatement?