Suppose consumers pay less than the true cost of medical services because a third party, such as an insurance company, pays most of the bill.Draw a graph showing the supply and demand for medical services with and without a third-party payer.Identify the market equilibrium without insurance, the market equilibrium with insurance, and the area representing the deadweight loss.Be sure to label the efficient and the market prices and quantities.

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The Answer of Suppose consumers pay less than the true cost of medical services because a third party, such as an insurance company, pays most of the bill.Draw a graph showing the supply and demand for medical services with and without a third-party payer.Identify the market equilibrium without insurance, the market equilibrium with insurance, and the area representing the deadweight loss.Be sure to label the efficient and the market prices and quantities.

Suppose Consumers Pay Less Than the True Cost of Medical