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Economics

Suppose from your randomized experiment you observed two data points about demand for healthcare:

- An average number of outpatient care visit of 2.65 per year among individuals who are assigned to health insurance plan with 40% coinsurance rate. And,

- An average number of outpatient care visit of 1.45 per year among individuals who are assigned to the same health insurance plan with only difference of 80% coinsurance rate.

a) Is the data you observed provide evidence for downward sloping demand? Why?

b) Calculate price elasticity of demand

c) Is the demand elastic or inelastic? Explain.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92636752

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