Based on this information does city A underestimate overestimate or get correct the true value of the medical treatment?
value is Show more Assume the market price for a treatment is $500 and the demand curve representing the true value is given by P = 1000 .5Q. This is the demand curve for an individual city and city A and city B both have this same true demand curve. In city A 500 units of the medical treatment are purchased and in city B 1500 units are purchased at the $500 price. Based on this information does city A underestimate overestimate or get correct the true value of the medical treatment? What about city B? (if any) in each city fWhat is the welfare loss rom uncertainty? Show lessvalue is Show more Assume the market price for a treatment is $500 and the demand curve representing the true value is given by P = 1000 .5Q. This is the demand curve for an individual city and city A and city B both have this same true demand curve. In city A 500 units of the medical treatment are purchased and in city B 1500 units are purchased at the $500 price. Based on this information does city A underestimate overestimate or get correct the true value of the medical treatment? What about city B? What is the welfare loss (if any) in each city from uncertainty? Show less
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