The demand function is Q = 600 - P, with P being the price paid by consumers.
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Question:
The demand function is Q = 600 - P, with P being the price paid by consumers. Put a list of prices ranging from $400 to $0 in a column labeled P. (Use intervals of $50.)
a. Consumers have insurance with 40 percent coinsurance. For each price, calculate the amount that consumers pay. (Put this figure in column PNet.)
b. Calculate the quantity demanded when there is insurance. (Put this figure in column DI.)
c. Plot the demand curve, putting P (not PNet) on the vertical axis.
d. The quantity supplied equals 2 x P. Put these values in a column labeled S.
e. What is the equilibrium price?
f. How much do consumers spend?
g. How much does the insurer spend?
Related Book For
Managerial Economics and Strategy
ISBN: 978-0321566447
1st edition
Authors: Jeffrey M. Perloff, James A. Brander
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