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Joe's demand curve for office visits is Quantity = 100-5p. In other words, Joe's Willingness to pay for the N^th visit = 20-0.2N^th visit. Joe has an insurance policy that covers up to $100 at a $0 copayment up to the limit. After hitting the limit, he pays for all services at 100%.
a. Draw Joe's demand curve.
b. Suppose the price of an office visit is $5. Draw the patient-Experienced Price Line above and label it B.
c. If Joe is optimizing, how many office visits will Joe have?
d. the price of a visit increases to $20. Draw the new patient-Experienced Price Line above the label it D.
e. If Joe is optimizing, how many office visits will Joe have?
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