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Suppose the drug is now covered by a public health insurance plan and everyone is eligible. Under this plan, the co-insurance rate is 10% and
Suppose the drug is now covered by a public health insurance plan and everyone is eligible. Under this plan, the co-insurance rate is 10% and the payment from the insurer is capped at $54. That is, the insurer will pay 0.9P if P$60 and the insurer will pay $54 if P>$60. What is the market demand under this insurance policy? What is the equilibrium price and quantity? How much does this policy cost the insurer
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