Suppose that the market demand for medical care is summarized by the demand function:

Qd =2002p and the market supply is summarized by the supply function:

Qs =20+2p

(a) Calculate the equilibrium quantity and price, assuming no health insurance is available.

(b) Suppose that health insurance is made available that provides for a 10 percent coin- surance rate. Calculate the new equilibrium price and quantity.

(c) Calculate the deadweight loss due to this insurance.

(d) Compare your answers in this problem to problem 9 (a) - (c).