Problem
Assume that medical expenditures are fully deductible from taxes. Show diagrammatically the effect on the demand for medical services. If the elasticity of demand with respect to price is .7, what is the effect of deductibility on an individual in the 15 percent marginal tax bracket; in the 28 percent marginal tax bracket; in the 40 percent marginal tax bracket?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.