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Suppose the demand for anxiety medication prescriptions is given by P = 300 - Q. Suppose the supply (i.e. marginal cost) of anxiety medicine is
Suppose the demand for anxiety medication prescriptions is given by P = 300 - Q. Suppose the supply (i.e. marginal cost) of anxiety medicine is given by P = 20 2Q. a) What is the equilibrium quantity demanded in the absence of any insurance coverage for anxiety medication? b) Now, suppose there is insurance coverage for anxiety medication, where the cost sharing (i.e., co-insurance rate) is 25%. What is the new quantity demanded? c) Under the insurance structure given in part (b), what is the deadweight loss associated with the presence of insurance coverage
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