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?

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Rahul Sunny answered 2 years ago

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

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