A) The demand function is Q = 600 - P, with P being the price paid by consumers. Put a list of prices ranging from $400 to $0 in column labeled P. (Use intervals of $50.) a. Consumers have insurance with 40 percent coinsurance. For each price, calculate the amount that consumers pay. (Put this figure in column PNet.) b. Calculate the quantity demanded when there is insurance. (Put this figure in column DI.) c. Plot the demand curve, putting P (not PNet) on the vertical axis. d. The quantity supplied equals 2 × P. Put these values in a column labeled S. e. What is the equilibrium price? f. How much do consumers spend? g. How much does the insurer spend?
B) The table below contains data on the number of doses of an Antihistamine sold per month in a small town.
a. To sell 196 doses to Customers, what will the price need to be?
b. For stores to be willing to sell 196 doses, what will the price need to be?
c. How many doses will customers want to buy if the price is $2?
d. How many doses will suppliers want to sell if the price is $2?
e. Is there excess supply or excess demand at $2?
f. What is the equilibrium price? How can you tell?
|
Price $
|
Demand
|
Supply
|
|
10
|
185
|
208
|
|
9
|
187
|
205
|
|
8
|
188
|
202
|
|
7
|
190
|
199
|
|
6
|
191
|
196
|
|
5
|
193
|
193
|
|
4
|
194
|
190
|
|
3
|
196
|
187
|
|
2
|
197
|
184
|
|
1
|
199
|
181
|