## Related questions with answers

"Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only$20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the$80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100."

Solution

VerifiedIn this solution, we are required to graph the supply and demand curve using the given equations. We are also supposed to determine the equilibrium price and quantity.

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