Suppose, if ill, that Fred’s demand for health services is summarized by the demand curve Q = 50 – 2P, where P is the price of services. How many services does he buy at a U = 20Ywhere U is utility...

Suppose, if ill, that Fred’s demand for health services is

summarized by the demand curve Q = 50 – 2P, where P is

the price of services. How many services does he buy at a

U = 20Ywhere U is utility and Y is income per month.

price of $20? Suppose that Fred’s probability of illness is

0.25. What is the actuarially fair price of health insurance

for Fred with a zero coinsurance rate?