Suppose that there is only one type of medical care (office visits), and that each visit...

 

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Suppose that there is only one type of medical care (office visits), and that each visit costs $20. Consider an insurance policy with a $200 deductible that pays for 70% of the consumer's medical costs after that. 1) 2) Draw such a price schedule where the Y axis is the price that the consumer faces and the X axis is the quantity. Draw a consumer demand curve for office visits q=24-p, where q is the number of office visits, and p is price of office visits, on the same graph as 1). Make sure to label the quantity and the price at each point the demand curve intersects the price schedule. What is the optimum quantity for this patient to consume? Why? 3) 4) What is the consumer surplus at the optimum quantity? Suppose that there is only one type of medical care (office visits), and that each visit costs $20. Consider an insurance policy with a $200 deductible that pays for 70% of the consumer's medical costs after that. 1) 2) Draw such a price schedule where the Y axis is the price that the consumer faces and the X axis is the quantity. Draw a consumer demand curve for office visits q=24-p, where q is the number of office visits, and p is price of office visits, on the same graph as 1). Make sure to label the quantity and the price at each point the demand curve intersects the price schedule. What is the optimum quantity for this patient to consume? Why? 3) 4) What is the consumer surplus at the optimum quantity?

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1 The price schedule Office Visits q Price to Consumer 0 0 ... View the full answer