1.5 Draw standard market supply and demand curves for physician office visits. Assume that the demand D1 is with FFS insurance (purchased in a competitive insurance market) so that the equilibrium price (e.g., $80) is the price received by physicians. With a coinsurance rate of 10%, the out- of- pocket cost to patients is $8 per visit and the HMO pays $72. Assume that the equilibrium annual quantity is one million visits.

a Physicians’ total revenues are $ _ b Insurance payments to physicians are $ _ c Patients’ total out- of- pocket costs are $ _ d Insurance premiums (if this is the only covered service) must be at least $ _