The figure below shows Ava's demand curve for days in the hospital. The marginal cost of an additional day in the hospital is $200. Compared to when Ava has to pay the entire marginal cost of spending a day in the hospital, what is the loss in total economic surplus that would result from Ava having a first-dollar insurance plan?
A)$100
B)$200
C)$300
D)$400

Question

The figure below shows Ava's demand curve for days in the hospital. The marginal cost of an additional day in the hospital is $200.  Compared to when Ava has to pay the entire marginal cost of spending a day in the hospital, what is the loss in total economic surplus that would result from Ava having a first-dollar insurance plan?
A)$100 
B)$200 
C)$300 
D)$400

Quizplus · Accepted Answer

The Answer of The figure below shows Ava's demand curve for days in the hospital. The marginal cost of an additional day in the hospital is $200.  Compared to when Ava has to pay the entire marginal cost of spending a day in the hospital, what is the loss in total economic surplus that would result from Ava having a first-dollar insurance plan?
A)$100 
B)$200 
C)$300 
D)$400

The Figure Below Shows Ava's Demand Curve for Days in the Hospital