2. What does the demand
curve for health care
look like?
It is downward sloping
just as there is for other
goods and services
2
3. What does the supply
curve for health care
look like?
It is upward sloping just like
the supply for other goods
and services
3
4. P The Supply & Demand
for Health Care
C S
P3
A Copayment Q
P1
B
P2
D
Q1 Q2
4
Q
5. What is the
copayment rate?
The percentage of the cost
of services consumers pay
out of pocket
5
6. What effect does the
copayment rate have on
the quantity of health
care demanded?
It increases the quantity
demanded because people
pay on average only 20%
of the cost
6
7. What can cause shifts
in the demand for
health care?
A change in ...
• Number of buyers
• Tastes and preferences
• Income
• Prices of substitutes
7
8. The effect of an increase in demand on
market equilibrium for health care
E2
S
P2
E1
P1 D2
D1
Q1 Q2
8
9. The effect of a decrease in demand on
market equilibrium for health care
E1
S
P1
E2
P2 D1
D2
Q2 Q1
9
10. Increase in
quantity
supplied
Increase in
equilibrium
price
Increase in
demand
10
11. Decrease in
quantity
supplied
Decrease in
equilibrium
price
Decrease in
demand
11
12. What can cause shifts
in the supply for
health care?
A change in ...
• Number of sellers
• Resource prices
12
13. The effect of a decrease in supply on
market equilibrium for health care
S1 S
E1 2
P1
E2
P2
D
Q1 Q2
13
14. The effect of a decrease in supply on
market equilibrium for health care
S2 S
E2 1
P2
E1
P1
D
Q2 Q1
14
15. Increase in
quantity
demanded
Decrease in
equilibrium
price
Increase in
supply
15
16. Decrease in
quantity
demanded
Increase in
equilibrium
price
Decrease in
supply
16
