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

question 104

Multiple Choice

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

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