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Graph of Alfred's Demand for Clinic Visits

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Consider the following information on Alfred's demand for visits per year to his health clinic, if his health insurance does not cover clinic visits (100% coinsurance rate).
P Q
5 9
10 9
15 9
20 8
25 7
30 6
35 5
40 4

(a) Alfred has been paying $30 per visit. How many visits does he make per year? Draw his demand curve.

(b) What happens to his demand curve if the insurance company institutes a 40% coinsurance feature (Alfred pays 40% of the price of each visit)? What is his new equilibrium demand?

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Solution Summary

This solution shows how to calculate Alfred's demand for health clinic visits with and without insurance. The results are illustrated with a graph and provided in an Excel spreadsheet.

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a) Alfred has been paying $30 per visit. How many visits does he make per year? Draw his demand curve.

Without insurance, Alfred will consume 6 visits at P = $30. The attached file shows the demand curve D plotted with the number of visits on the x-axis and the price on the ...

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