Suppose a company has invented and patented a new effective drug to treat hay fever. For simplicity, assume there is no fixed cost and the marginal cost of producing the drug is: 4$. Without being covered in any insurance plan, the market demand is as follows: Qd=1000-40P

1. Suppose the drug is covered by a public health insurance plan and everyone is eligible. Under this plan, the co-insurance rate is 20% and the payment from the insurer is capped at $20. That is, the insurer will pay 0.8P if P is greater or equal to $24 and the insurer will pay $20 if P is greater than $24. What is the market demand under this insurance policy? What price should the company charge and what is the equilibrium quantity?