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

Qd

= 100 − 2p 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 20 percent coin surance rate. Calculate the new equilibrium price and quantity. (Hint: How does the demand curve shift?)

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