Consider Troy and Paula, each of whom recently purchased health insurance with a 20% coinsurance rate (i.e., an insured person pays 20% of the price of a physician visit). Troy's demand curve for physician visits is Q_R = 6, and Paula's demand curve for physician visits is Q_P = 20 - 0.10P, where Q represents the number of physician visits and P is the price per visit. Suppose that the market price, P, for physician visits is $100. With insurance coverage, Paula will visit the physician ____ times. A) 18 B) 10 C) 6 D) 5

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Quizplus · Accepted Answer

With a 20% coinsurance rate, Paula pays $20 per visit. Substituting P = 20 into her demand curve Q_P = 20 - 0.10P, we get Q_P = 20 - 0.10(20) = 18 visits.

Consider Troy and Paula, Each of Whom Recently Purchased Health