Question: Tony currently goes to the dentist twice a year at

Tony currently goes to the dentist twice a year at $ 150 per visit. His employer subsidizes Tony’s purchases by paying half the cost of each dental visit in excess of one visit per year. (No subsidy is granted on the first visit.) Show how this affects Tony’s budget line and his purchases of dental services. Identify in a diagram how much Tony spends on dental work and how much his employer spends in subsidizing his consumption.


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  • CreatedNovember 14, 2014
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