An individual's demand for physician office visits in a given year is given by, Q =...

An individual's demand for physician office visits in a given year is given by, Q = 10 - 0.04P, where Q is the number of office visits and P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office visit is $180.

a) Suppose the individual has insurance and pays only $40 a copayment for each visit. How many office visits will the individual make in one year?

b) What is the moral hazard and deadweight loss associated with having insurance?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Healthcare Moral HazardAn individual's demand for physician office visits in agiven year is given...

Healthcare Moral HazardAn individual's demand for physician office visits in a given year is given by, Q = 14 - 0.075P, where Q is the number of office visits and P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office visit is $150.Use this information to answer the questions below.Questions (4):1. Without insurance, how many office visits would the individual make in one year?NOTE: Enter a formula to calculate the number...

2. Suppose that an individual’s demand for the number of physician visits per year, Q, can...

2. Suppose that an individual’s demand for the number of physician visits per year, Q, can be represented by the following equation: Q = 5 – 0.04P, where P, the market price of an office visit, equals the marginal cost of $100. Determine the efficient number of office visits according to conventional theory. Now assume that the person purchases complete health insurance coverage and the demand for (but not quantity demanded of) physician care remains unchanged. How many times would...

Ralph has a demand curve for office visits (Qd) to the doctor in a year given...

Ralph has a demand curve for office visits (Qd) to the doctor in a year given by Qd = 20 – (P/10) where P is the price of an office visit for Ralph. If the list price of an office visit is $50 and Ralph purchases health insurance in which he has a coinsurance rate of 20% (so Ralph pays only $10 for each visit), how many additional office visits at a list price of $50 does Ralph make relative...

Suppose the inverse demand for physician office visits is P = 1000 - 20Q. Now suppose...

Suppose the inverse demand for physician office visits is P = 1000 - 20Q. Now suppose an insurance policy provides a co-insurance rate of 50%. Graph the old and the new demand functions (with and without health insurance) and mark their intercepts on the Price (vertical) and Quantity (horizontal) axes.

Suppose that in the absence of insurance, the inverse demand for office doctor visits is given...

Suppose that in the absence of insurance, the inverse demand for office doctor visits is given by the equation P1 = 150 - 30Q. Graph the demand curve. Graph the demand curve when the person has health insurance with a coinsurance rate of 25%. What is demand for visits with and without insurance when doctors receive $60/visit?

suppose that in the absence of insurance, the inverse demand for office doctor visits is given...

suppose that in the absence of insurance, the inverse demand for office doctor visits is given by the equation P=150 - 30Q. a. Graph the demand curve. b. graph the demand curve when the person has health insurance with a coinsurance rate of 25%. c. what is demand for visits with and without insurance when doctors receive €60/visit?

The market demand for primary care visits is given by the inverse demand curve ?? =...

The market demand for primary care visits is given by the inverse demand curve ?? = 400 – 8? and the inverse market supply is ?? = 40 + 4?. a. Graph the market supply and demand and indicate the market equilibrium values for price and quantity. b. Suppose that the consumers in this market are then provided health insurance that pays for all services after consumers pay a 40% coinsurance rate for every visit. On the same graph, graph...

The market demand for primary care visits is given by the inverse demand curve ?? =...

The market demand for primary care visits is given by the inverse demand curve ?? = 400 – 8? and the inverse market supply is ?? = 40 + 4? . a. Graph the market supply and demand and indicate the market equilibrium values for price and quantity . b. Suppose that the consumers in this market are then provided health insurance that pays for all services after consumers pay a 40% coinsurance rate for every visit. On the same...

The following table depicts the weekly demand and supply of office visits at a local children’s...

The following table depicts the weekly demand and supply of office visits at a local children’s clinic staffed by four physicians. Price per visit Quantity demanded Quantity supplied $20 300 150 25 275 175 30 250 200 35 225 225 40 200 250 45 175 275 50 150 300 What are the equilibrium price and quantity of office visits per week? If one of the physicians moves to another city, reducing quantity supplied by 25 percent, what are the price...

Jose has a downward sloping demand curve for physician visits. a. Show Jose’s optimal choice of...

Jose has a downward sloping demand curve for physician visits. a. Show Jose’s optimal choice of physician visits assuming he has no health insurance and faces a market price of physician visits, PV. b. Now assume Jose has an insurance policy with a 15 percent coinsurance rate and no deductible. Would Jose’s optimal number of visits increase or decrease? Show the welfare impact of health insurance coverage. c. How would an increase in the coinsurance rate to 30 percent change...

Subjects