Assume demand for medical services is expressed by the following equation: 3Qd =1800−9PP, where PP isthe...

Assume demand for medical services is expressed by the following equation: 3Qd =1800−9PP, where PP isthe out-of-pocket price. Further, assume this medical service has a list price of PL = $40.

a. Draw the demand curve (i.e., straight line) expressed by the quantity demanded (Qd) equation given above on a graph with price on the vertical axis and Qd on the horizontal axis. Show the y- and x-intercepts.

b. What is Pp under no insurance? Calculate the Qd under no insurance. Show/mark Qd and Pp under no insurance on the graph drawn in part a.

c. Is there any welfare loss under no insurance? Why or Why not? If any welfare loss, calculate the welfare loss and show the area that represents welfare loss on the graph drawn in part a.

d. What is Pp under full insurance? Calculate the Qd under full insurance. Draw the demand curve that represents Qd under full insurance on a graph with price on the vertical axis and Qd on the horizontal axis. Help/Tip: It may help to see the answer for this part, and more importantly for the next part (part e), if you re-draw the demand curve from part a on the same graph you are asked to draw in this part, with price on the vertical and Qd on the horizontal axis as usual.

e. Is there any welfare loss under full insurance? Why or why not? If any welfare loss, calculate the welfare loss and show the area that represents welfare loss on the graph drawn in part d.

Expert Solution

Rahul Sunny answered 2 years ago

Assume that the labour demand equation for a fictional country is Ld= 30 – w, where...

Assume that the labour demand equation for a fictional country is Ld= 30 – w, where w is the wage per hour worked. Also, assume that the labour supply equation for that country is Ls= 0.5(w). Instructions: Round your answers to the nearest whole number. a. The equilibrium wage is $__ , and the equilibrium quantity of labour employed is __ workers. b. At the equilibrium wage, ___ people are unemployed. c. If the supply of workers increased, the number...

Consider for the following subquestions a university medical services department. - Consider a university medical services...

Consider for the following subquestions a university medical services department. - Consider a university medical services department. Describe what could be the typical information items that are kept within the information system of such a department. -What details should be included in a typical physical vital records inventory specifically for at least one type of data records at such a medical services department which is needed for business recovery planning. -Describe the typical functions of a university medical services department...

Assume that the market demand curve for pesticides is given by the following equation: P(D) =...

Assume that the market demand curve for pesticides is given by the following equation: P(D) = 1000 − 2Q(D), and the market supply curve, which is equal to the aggregated marginal cost curve of all producers, is given by, P(S) = 200 + 2Q(S). Pesticide production, however, is associated with harmful side effects on both workers and nearby households and firms. The total damage to the surroundings is proportional to output according to: SMC= 250 + 2Q. a) Without any...

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where...

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where P is the price (dollars per 100 lbs.), and Q is quantity. Furthermore, assume that cocoa can be produced at a constant marginal and average cost of $10 per unit of Q. Cocoa producers have formed a cartel, aimed at realizing the monopoly price for cocoa. Given the demand equation and marginal cost specified above, what is the monopoly price and quantity?

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where...

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where P is the price (dollars per 100 lbs.), and Q is quantity. Furthermore, assume that cocoa can be produced at a constant marginal and average cost of $10 per unit of Q. Cocoa producers have formed a cartel, aimed at realizing the monopoly price for cocoa. Given the demand equation and marginal cost specified above, what is the monopoly price and quantity? The monopoly...

Let assume an economy in this year with the following loanable funds (LF) market demand equation....

Let assume an economy in this year with the following loanable funds (LF) market demand equation. Demand: r=8-0.005*QD Where, r is the real interest rate (if r = 12 then the interest rate is 12%), QD in the quantity demanded of loanable funds (total investment). The government expenditures (G) is $300 billion, collected taxes (T) equal to $700 billion, and private saving is $800 billion. Calculate the value of government savings in this economy. Is the government running a budget...

Question : A monopoly market structure firm is facing the following demand curve Q = 1800...

Question : A monopoly market structure firm is facing the following demand curve Q = 1800 - 25P. Its short-run total cost is given by :100+7Q+0.025Q2. Find the following for this firm: a. His profit maximizing quantity, price and TR? b. If this firm want to incur an average selling cost of Rs 33 per unit will the firm face below, above or just normal profits?

With health insurance coverage, demand for medical services in general will become ______________. Group of answer...

With health insurance coverage, demand for medical services in general will become ______________. Group of answer choices unchanged in price elasticity unitary price elastic more price elastic less price elastic

Assume that the demand for oranges is represented by the equation P = 50 - Qd...

Assume that the demand for oranges is represented by the equation P = 50 - Qd and supply by the equation P = 25 + Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively and P is price. Using the equilibrium condition Qs = Qd, solve the equations to determine the equilibrium price. Now determine equilibrium quantity. Graph both equations. Compute and show graphically consumer surplus and producer surplus if government imposes a price floor of $42....

Assume that demand for a commodity is represented by the equation P = 10 – 0.2...

Assume that demand for a commodity is represented by the equation P = 10 – 0.2 Q d, and supply by the equation P = 5+ 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condition Qs = Qd a. Solve the equations to determine equilibrium price b. Now determine the equilibrium quantity c. Graph the two equations to substantiate your answers and label these two graphs...

Question

Assume demand for medical services is expressed by the following equation: 3Qd =1800−9PP, where PP isthe...

Solutions

Expert Solution

Related Solutions

Assume that the labour demand equation for a fictional country is Ld= 30 – w, where...

Consider for the following subquestions a university medical services department. - Consider a university medical services...

Assume that the market demand curve for pesticides is given by the following equation: P(D) =...

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where...

The global demand for cocoa can be represented with the following equation: P=50 - 0.25Q, where...

Let assume an economy in this year with the following loanable funds (LF) market demand equation....

Question : A monopoly market structure firm is facing the following demand curve Q = 1800...

With health insurance coverage, demand for medical services in general will become ______________. Group of answer...

Assume that the demand for oranges is represented by the equation P = 50 - Qd...

Assume that demand for a commodity is represented by the equation P = 10 – 0.2...