One way to reduce the amount consumers spend on health care


One way to reduce the amount consumers spend on health care is to raise the price of health care by increasing the health insurance copayment (i.e., the portion of the price patients must pay themselves). At current copayment levels, if the price elasticity of demand for visits to see the doctor is –0.25, by what percentage will the quantity demanded of doctor visits decrease if the copayment is raised from 20 percent to 25 percent? (Be careful, the percentage change in price is not 5 percent in this problem.)

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Business Economics: One way to reduce the amount consumers spend on health care
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