- Consider demand: x(p₁) = 400 — 2p1 At a market price of p₁ = $125 per unit: • Determine the social loss due to moral hazard when assuming: 1. Full insurance compared to uninsured 2. A co-payment of $50 compared to uninsured 3. A 75% coinsurance rate compared to uninsured

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Consider demand: x(p₁) = 400 — 2p1
At a market price of p₁ = $125 per unit:
• Determine the social loss due to moral hazard when assuming:
1. Full insurance compared to uninsured
2. A co-payment of $50 compared to uninsured
3. A 75% coinsurance rate compared to uninsured
Transcribed Image Text:- Consider demand: x(p₁) = 400 — 2p1 At a market price of p₁ = $125 per unit: • Determine the social loss due to moral hazard when assuming: 1. Full insurance compared to uninsured 2. A co-payment of $50 compared to uninsured 3. A 75% coinsurance rate compared to uninsured
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