Similar to psychologist visits, Medicaid must make a decision how many doses of an efficient depression medication to present. The Medication is cheaper at $15 per dose, since the Medicaid can negotiate large volume discounts from the 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
|
|
|
1. Determine the marginal and the average benefit for depression medication doses showing your work, by using the correct units, and rounding to 2 decimal places where necessary.
2. Calculate the optimal number of doses for Medicaid to offer? Why?
3. Calculate the net benefit for psychology services and for depression medication assuming treatment is at the optimal quantity.