Q6. Suppose a company has invented and patented a new effective drug to treat hay fever. The marginal cost of producing the drug is: MC = $4. Without being covered in any insurance plan, the market demand is as follows: Qd = 800 40F a) Suppose now the public health insurer introduces the payment limit of $7.5 per unit of the drug; that is, the coinsurance rate of 25% applies if P S $10 but the insurance only pays $7.5 per unit if P > $10. > Derive the new market demand. Under this new market demand, what price should the firm charge? Justify your