the total cost of giving this insured service, Managerial Economics

The services of a certified psychologist cost $110 per hour, and an extended health plan covers 50 percent of that cost. Under the plan, the clients covered used 625 hours of this service in a typical three-month period. To save money, the extended health plan reduced its coverage to 40 percent of the cost. As a result, the clients covered decrease their use of this service to 482 hours in a typical three-month period.
 
a. Determine the total cost of giving this insured service to the plan before and after the change in coverage.
 

b. Based on the data above, calculate the elasticity of demand for the services of a certified psychologist. Interpret the elasticity of demand, and explain the behaviour of the clients covered based upon this  interpretation.

Posted Date: 3/16/2013 3:28:30 AM | Location : United States







Related Discussions:- the total cost of giving this insured service, Assignment Help, Ask Question on the total cost of giving this insured service, Get Answer, Expert's Help, the total cost of giving this insured service Discussions

Write discussion on the total cost of giving this insured service
Your posts are moderated
Related Questions
Compare the price elasticity at two parallel demand curves at a given price. This has been explained in Fig above where two demand curves AB and CD are given that are parallel to e


explain critically growth maximisation model of morris ?

real GDP is increasingly criticized for its alleged failure to adequately measure the standard of living. To what extent do you think this criticism is valid?

What is increasing marginal cost? Felix’s marginal cost is greater the more lawns he has previously mowed. It is, every time he mows a lawn, the extra cost of doing still anoth

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

CENTRAL BANK A modern central bank performs so many functions of different nature that it is difficult to give any brief yet accurate definition of a central bank. Any definiti

Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. If a price floor of $20 is set, what will be the size of the resulting surplus?

Perfectly Elastic Supply Supply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand.  The demand curve has been shown in the above diag

Limitations of Open Market OperationsLimitations For their success central bank open market operation assume that commercial banks in the country will expand their credit port