Suppose that the market demand for medical care is summarized by the demand function: and the market
Question:
Suppose that the market demand for medical care is summarized by the demand function:
and the market supply is summarized by the supply function:
(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 coinsurance rate. Calculate the new equilibrium price and quantity. (Hint: How does the demand curve shift?)
(c) Calculate the deadweight loss due to this insurance.
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Related Book For
The Economics Of Health And Health Care
ISBN: 9781138208049
8th Edition
Authors: Sherman Folland, Allen C. Goodman, Miron Stano
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