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Suppose that the price elasticity for hip replacement surgeries is 0.2. Further suppose that hip replacement surgeries are originally not covered by health insurance and that at a price of $50,000 each, 10,000 such surgeries are demanded each year.(Hint: Do not bother to calculate the percentage changes using the midpoint formula. If insurance covers 50 percent of the bill, just assume that the price paid by consumers falls 50 percent.) ____________ % What if insurance covered 90 percent of the price? % b. Suppose that with insurance companies covering 90 percent of the price, the increase in demand leads to a jump in the price per hip surgery from $50,000 to $100,000. How much will each insured patient now pay for a hip replacement surgery? $ Compared to the original situation, where hip replacements cost $50,000 each but people had no insurance to help subsidize the cost, will the quantity demanded increase or decrease? Decrease Increase By how much? One way restriction messageclose windowYou may not interact with questions in this series after you have submitted them.
Design a simple econometric research project
Multiplicative decomposition method
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