In this example, imagine 4 consumers who are identical in every way with the exception that they have different insurance plans. Assumption: For this question, ignore the cost of producing a visit. Assume physician is trying to maximize revenue. Furthermore, assume that a visit is indivisible and if a person is indifferent, she chooses to make the visit. Here are each of their prices schedules for physician services: A : flat $80/visit B : flat $70/visit C : flat $70/visit + $10/year membership fee. D : Variable schedule: $140/visit for first 1 visit • $100/visit for next 2 visits $80/visit for next 2 visits

In this example, imagine 4 consumers who are identical in every way with the exception that they have different insurance plans. Assumption: For this question, ignore the cost of producing a visit. Assume physician is trying to maximize revenue. Furthermore, assume that a visit is indivisible and if a person is indifferent, she chooses to make the visit. Here are each of their prices schedules for physician services: A : flat $80/visit B : flat $70/visit C : flat $70/visit + $10/year membership fee. D : Variable schedule: $140/visit for first 1 visit • $100/visit for next 2 visits $80/visit for next 2 visits

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST7: The Economics Of Health Care

Section: Chapter Questions

Problem 1CQ

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