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As Governor,Lynda Has Decided to Balance the Budget by Reducing

Question 66

Multiple Choice

As governor,Lynda has decided to balance the budget by reducing the number of people for whom the government provides health care.How does this affect the equilibrium price and quantity of medical services?


A) They are not affected.
B) They have risen as demand has increased,but supply has remained constant.
C) They have risen because supply and demand have decreased.
D) They have fallen because demand has decreased and supply has remained constant.
E) Equilibrium price has fallen and quantity has risen because demand has decreased and supply has remained constant.

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