Suppose health insurance policies did not cover prescription drugs in their plans.

1. What would be the price of a prescription? Why?

2.How many prescriptions would be bought? Why?

3.How many prescriptions would be sold? Why?

Now suppose prescription drugs are covered in health plans offered by health insurance companies such as CVS Health Corp.

4.What would be an appropriate price to choose as the initial copayment? Why?

5.How many prescriptions would consumers want to buy at that price? Why?

6.How many prescriptions would the drugstore want to sell at that price? Why?

7.How many prescriptions would be sold? Why?

8.How much would the consumer pay? How much would the drugstore receive? Why?

9.What would be the per-unit-cost of the prescription drug to the health insurance company?

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