Similar to psychologist visits Medicaid must decide how many doses of an effective depression medic Show more Similar to psychologist visits Medicaid must decide how many doses of an effective depression medication to offer.
Medication is cheaper at $15 per dose since Medicaid can negotiate large volume discounts from pharmaceutical companies although the total benefits are commensurately lower: Number of Doses Total Benefit Marginal Benefit Average Benefit 1 $75 2 $115 3 $145 4 $170 5 $185 a. In the table above calculate the marginal and average benefit for depression medication doses showing your work using correct units and rounding to two decimal places where necessary. b. What is the optimal number of doses for Medicaid to offer? Why? c. Compute the net benefit for psychology services and for depression medication assuming treatment is at the optimal quantity Show less
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