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If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,
A) the prices of health-care services will rise by only a small amount, but the quantity supplied will increase substantially.
B) the prices of health-care services will rise substantially, but the quantity supplied will increase by only a small amount.
C) both health-care prices and the quantity of the services supplied will increase substantially.
D) the prices of health-care services will decline, but there will be only a small change in the quantity supplied.
Government Subsidies
Financial assistance provided by the government to individuals, organizations, or industries to encourage or support certain activities or reduce their costs.
Health-Care Services
Services provided to individuals or communities by health professionals for the purpose of promoting, maintaining, monitoring, or restoring health.
Inelastic
Describing a situation in which the quantity demanded or supplied of a good or service is relatively unresponsive to changes in price.
- Discern the effects of financial structuring in healthcare on the costs associated with healthcare and economic stimuli.
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Learning Objectives
- Discern the effects of financial structuring in healthcare on the costs associated with healthcare and economic stimuli.
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