Question

Microeconomics question: Copayment is $20, market equillibrium is 5 million visits per month at $80 per visit.Under a copayment plan, the quantity of visits demanded by consumers is ___ million visits per month. Doctors are willing to supply this number of office visits at a price of $___ per visit. Therefore the government will pay $___ per visit under the copayment scheme.

Quantity of vists per month (in millions)	Dollars per visit
0	0
1	20
2	40
3	60
4	80
5	100
6	120
7	140
8	160
9	180
10	200

Answer 1

Since the Copayment is $20, market equillibrium is 5 million visits per month at $80 per visit.

It means equilibirium quantity demand and supply is 5 millions visits per month.

Hence,Under a copayment plan, the quantity of visits demanded by consumers is 5 million visits per month. Doctors are willing to supply this number of office visits at a price of $100 per visit. Therefore the government will pay $20 per visit under the copayment scheme.

This is because the government under the scheme of copayment, pay $20 per visits and remaining amount is paid by the consumers. So at equilibrium the consumers pay $80 per visits and government pay $20 per visits, therefore the equilibrium price is $100 per visits.