Why might the increase in quantity demanded

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Reference no: EM13208689

Joe has a demand curve for medical care given by m=100-0.5pm.

a) Draw this demand curve, labeling the values of the y- and x-intercepts.

b) Show how his demand curve and values of the y- and x-intercepts change if he obtains health insurance with no deductible and a 20% coinsurance rate.

c) Suppose the market price of medical care is pm=$50. What is Joe's quantity demanded without insurance? What about with insurance?

d) Why might this increase in quantity demanded as a result of obtaining insurance actually decrease social welfare?

Reference no: EM13208689

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