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I have no idea how to create a formula or what basis i should use. Please help!You are the administrator for a medical practice. Assume all ofyour practice’s patients are covered by insurance. Insurance pays, on average,80% of your fee for a physician visit for which your practice charge is $100.The patient is responsible for the $100 fee, but receives 80% back from theinsurer. Currently, your practice’s volume for this service is 1,500 per year.Estimate what would happen to the volume of services and theexpected revenue to the practice should the area’s health insurers increasepatient cost sharing from 20% to 30% of this charge. Use the concept of “priceelasticity” to make the projection.Use the elasticities given in Wedig’s 1988 study: price elasticityfor physician visits for patients in good or excellent health is –0.35 whilethe price elasticity for physician visits for patients in fair or poor healthis –0.16. (Wedig, G.J. 1988. Health status and the demand for health: Resultson price elasticities. Journal of HealthEconomics, 7, 151–163.)After a quick survey, you decide that 65% of the practice’spatients are in at least good health and account for 1,000 of the 1,500 visits.The remaining patients are in fair or poor health.For Questions 2 to 4, write out all the steps of the calculation.For Questions 3 and 4, write answers separately for patients in each categoryof health status—excellent, good, fair, poor—and for all patients.Define price elasticity in economic terms and describehow it will be useful to you here. this one I can do…. the following are the confusing ones. My book does not give examples for formula.What would be the amountthat patients would have to pay for this service before and after the change?How much would the volume ofservices change?How much would your practicerevenue change?Should the practice adjustits fee? If so, explain how you would calculate the new fee.