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Suppose a visit to the dentist costs $80. Naomi's yearly demand for dental care visits is given by the following equation: P = 160 -
Suppose a visit to the dentist costs $80. Naomi's yearly demand for dental care visits is given by the following equation: P = 160 - 20Q a. Suppose that the government introduces a new form of public dental care insurance, financed through income tax payments. The insurance features a $160 deductible. I. [2 points] How many dental visits would Naomi have to pay out of pocket, before the public insurance starts paying? ii. With this new insurance plan, how many dental visits does Naomi purchase in a given year? Explain briefly. b. (12 points] Suppose that the government increases the amount of the deductible to $560. How many dental visits does Naomi purchase in a given year? Explain briefly and illustrate your explanation using a graph. Please draw a new graph here c. From the perspective of the government, what are two advantages of using a deductible in its new dental care insurance plan? Explain
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