the figure above represents the market for medical services with and without ins
ID: 1199105 • Letter: T
Question
the figure above represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services.
Please show all work/Calculations to the quetions below. Thank you.
a) If consumers paid the full price of medical services, what is the price they would pay ?
b) If consumers paid the full price of medical services, what would the equilibrium quantity be?
c) With insurance and a third-party payer system, what price do doctors receive for medical services?
d) With insurance and a third-party payer system, what price do consumers pay for medical services?
e) With insurance and a third-party payer system, what is the equilibrium quantity of medical services?
f) What is the efficient price of medical services?
g) What is the efficient quantity of medical services?
Price of medical services Supply $55 40 25_. Quantity of medical services 500 700Explanation / Answer
a) It will be $40 where D1 = SS
b) it will be 500 units where D1 = SS
c) Doctors will receive where D2 = SS a price = $55.
d) Consumers pay $25 where point of intersection of D2 and SS is joined to D1
e) Equilibrium quantity in this case will be 700 units.
f) Efficient Price - $55 It is equal to private cost + social Cost
g) Efficient Quantity = 700 units where D2 =SS
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.