Calculate the equilibrium quantity and price

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Suppose that the market demand for medical care is summarized by the demand function: Qd = 100-2P. The market supply is summarized by the supply function: Qs = 20 + 2P.

(a) Calculate the equilibrium quantity and price, assuming no health insurance is available.

(b) Suppose that health insurance is made available that provides for a 20 percent coinsurance rate. Calculate the new equilibrium price and quantity.

(c) Calculate the deadweight loss due to this insurance.

Reference no: EM132401289

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