The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30. Dsubsidy = $60. and Dsubsidy = $90 Price $240 $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 S-MCMCal Quantity of pediatrician visits -Dabidy-$30 Didy-580 Doubody-$30 MD private Tools A. DWL 30 A DWL a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is. visits b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90. Instructions: Use the tools provided "DWL 30' and 'DWLgo' to illustrate the deadweight loss for each subsidy Drag the points to move of resize
The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30. Dsubsidy = $60. and Dsubsidy = $90 Price $240 $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 S-MCMCal Quantity of pediatrician visits -Dabidy-$30 Didy-580 Doubody-$30 MD private Tools A. DWL 30 A DWL a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is. visits b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90. Instructions: Use the tools provided "DWL 30' and 'DWLgo' to illustrate the deadweight loss for each subsidy Drag the points to move of resize
Chapter5: Demand For Health And Medical Care
Section: Chapter Questions
Problem 9QAP
Related questions
Question
![The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay
for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current
demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30. Dsubsidy =
$60. and Dsubsidy = $90
Price
$240
$220
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
0
100
50
S-MC
Quantity of pediatrician visits
Cial
Dubsidy-510
Dobity-360
Dudy-130
private
MB
450
500
Tools
A.
DWL 30
DWL0
a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is.
visits
b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90.
Instructions: Use the tools provided "DWL 30' and 'DWL 90' to illustrate the deadweight loss for each subsidy Drag the points to move
or resize.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb33495c1-bb3e-4fda-a501-9c1837dc62a3%2F5d91c807-b1e3-437b-8eb9-28635cbc7bb0%2F9vb48s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The local government has decided that because children's health has large external benefits, it will offer a subsidy to help families pay
for visits to the pediatrician. However, the government isn't sure at what level to set the subsidy. The figure below shows the current
demand curve for pediatrician visits (MBprivate) and three alternative subsidies, represented by curves Dsubsidy = $30. Dsubsidy =
$60. and Dsubsidy = $90
Price
$240
$220
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
0
100
50
S-MC
Quantity of pediatrician visits
Cial
Dubsidy-510
Dobity-360
Dudy-130
private
MB
450
500
Tools
A.
DWL 30
DWL0
a. Assume that the correct level of subsidy is $60. The socially optimal level of pediatrician visits is.
visits
b. Compared to the efficient outcome, graph the deadweight loss that would result from subsidies of $30 or $90.
Instructions: Use the tools provided "DWL 30' and 'DWL 90' to illustrate the deadweight loss for each subsidy Drag the points to move
or resize.
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