Assume demand for medical care is given by x = 10-p. Derive the quantity demanded when...

Assume demand for medical care is given by x = 10-p. Derive the quantity demanded when the person is uninsured and the price is p = 6. Now consider an insurance policy with deductible of $60 and free coverage after the deductible. With this insurance, the quantity demanded:

A. Stay the same with respect to the quantity demanded when uninsured

B. Increases by 6 with respect to the quantity demanded when uninsured

C. Decreases by 6 with respect to the quantity demanded when uninsured

D. None of the above

Expert Solution

We are given

x=10-p

put p=6

x=10-p=10-6=4

Total Cost on medical care=p*x=6*4=$24

In case of insurance, first $60 will be paid by consumer which is higher than the total expenditure at prevailing prices.So, consumer will keep the quantity demanded unchanged.

So, correct option is

Stay the same with respect to the quantity demanded when uninsured

'

Rahul Sunny answered 2 years ago

1. In the market for coffee, quantity demanded is given by Q = 10 - P,...

1. In the market for coffee, quantity demanded is given by Q = 10 - P, and quantity supplied is given by Q = P, where Q represents tonnes of coffee per year. The government has decided to open the economy for international trade and the world price is $3. Following this action, total surplus will ____ by ____. Producer surplus will ____ by ____. Consumer surplus will ____ by ____. 2. In the market for tea, quantity demanded is...

Quantity demanded as a function of price is given by Q(P)=100-0.5 x P. If the market...

Quantity demanded as a function of price is given by Q(P)=100-0.5 x P. If the market price is P=€150 what is consumer surplus

Now, assume that the demand in the fish market is given by: Demand: Quantity = 10,...

Now, assume that the demand in the fish market is given by: Demand: Quantity = 10, 100 − 100 ∙ Price 5. Find the equilibrium price and quantity, and represent the demand, supply, and equilibrium in a graph (with quantity in the horizontal axis and price in the vertical axis). 6. How much money is each firm making in profit? 7. If there is free entry to the fish market, how many firms will there be in equilibrium in the...

If the original price of medical care (with no insurance) equal $1,000, the quantity demanded =...

If the original price of medical care (with no insurance) equal $1,000, the quantity demanded = 10. If insurance (Policy X) is provided, out of pocket drops to $400. Also the quantity of medical care that will be demanded rises to 40. What is the value of social loss due to insurance? $18,000 $36,000 $600 $60 none of the above

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2.

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2. What is the value of the elasticity of demand? Is it elastic or inelastic?

1. At a given quantity of a product demanded, an increase in demand for the product...

1. At a given quantity of a product demanded, an increase in demand for the product results in a rise in marginal revenue and hence the marginal revenue product of labor and demand for labor. Select one: a. TRUE b. FALSE 2. The "trilemma" concept refers to the fact that a nation may simultaneously select a combination of any two, but not all three, of the following: Select one: a. a managed, dirty float for the exchange rate; a non-independent...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is the market price and Q is the number of units you demand. Suppose the market price of medical care is $200 per unit, and you have an insurance plan that has a $2000 deductible and a coinsurance rate of .20 once that deductible is met. Use this information to answer parts a and b. a. Graph the price line and your demand curve. On...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is the market price and Q is the number of units you demand. Suppose the market price of medical care is $200 per unit, and you have an insurance plan that has a $2000 deductible and a coinsurance rate of .20 once that deductible is met.Use this information to answer parts a and b. I. Graph the price line and your demand curve. On the...

When demand is very elastic then if price rise then the quantity demanded will decrease in...

When demand is very elastic then if price rise then the quantity demanded will decrease in a big amount. When supply is very inelastic then if the sellers' received amount fall due to tax then the quantity supplied will not decrease too much. Hence if demand is very elastic and supply is very inelastic then consumers will bear a small amount of whole tax burden where producers will bear a large amount of whole tax burden. Now, if demand is...

1. In the market for tea, quantity demanded is given Q = 5 – P/2 and...

1. In the market for tea, quantity demanded is given Q = 5 – P/2 and quantity supplied is given by Q = P/2, where Q represents tonnes of tea per year. Suppose that the government provides a subsidy of $2 per ton of tea. After the introduction of the subsidy, the equilibrium price and quantity will be 2. Suppose that weekly demand for wool is given by P = 900 – Q, and supply is given by P =...

Question

Assume demand for medical care is given by x = 10-p. Derive the quantity demanded when...

Solutions

Expert Solution

Related Solutions

1. In the market for coffee, quantity demanded is given by Q = 10 - P,...

Quantity demanded as a function of price is given by Q(P)=100-0.5 x P. If the market...

Now, assume that the demand in the fish market is given by: Demand: Quantity = 10,...

If the original price of medical care (with no insurance) equal $1,000, the quantity demanded =...

When the price is $2, the quantity demanded is 10. When the price rises to $8, the quantity demanded falls to 2.

1. At a given quantity of a product demanded, an increase in demand for the product...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is...

Your inverse demand curve for medical care is given by P = 220-20Q, where P is...

When demand is very elastic then if price rise then the quantity demanded will decrease in...

1. In the market for tea, quantity demanded is given Q = 5 – P/2 and...