demand curve

demand curve

If the government pays 100% instead of 80% of each patient’s medical bill there would be a new demand curve D”.
a. Draw D” on your diagram.
b. Suppose taxpayers and the government want E to be only $10,000 so government imposes a price control of P* = $100. Then the suppliers (doctors, medical technology firms, drug firms) are only willing to supply Q = ________. But with P = $100, D is ( greater, less ) than Q; show this in the diagram. Many patients would be unhappy because there would be a w________ l________. How many patients would be unhappy? ________.
c. With P* = $100, if the government makes patients pay 20% (so insurance pays 80% instead of 100%) then the w________ l________ would be ( shorter than, the same as ) with 100% insurance because patient demand would be (less, the same). Also, switching from 100% insurance to 80% insurance would (increase, decrease) taxes.