Scenario 2.2:
In 1992, the Occupational Safety and Health Authority passed the Bloodborne Pathogens Standard (BBP), which regulates dental office procedures. This regulation is designed to minimize the transmission of infectious disease from patient to dental worker. The effect of this regulation was both to increase the cost of providing dental care and to ease the fear of going to the dentist as the risk of contracting an infectious disease.
-Refer to Scenario 2.2. What is the effect of the BBP on the equilibrium price of dental care?
A) It unambiguously increases.
B) It unambiguously decreases.
C) It increases only if supply shifts more than demand.
D) It increases only if demand shifts more than supply.

Question

Quizplus · Accepted Answer

The BBP regulation increases the cost of providing dental care due to the additional procedures and equipment necessary to minimize the transmission of infectious diseases. As a result, dental care providers may increase their prices to cover these costs. Additionally, the easing of fear of going to the dentist may increase demand, which could also cause prices to increase. Therefore, in this case, the equilibrium price of dental care unambiguously increases.

Scenario 2.2: in 1992, the Occupational Safety and Health Authority Passed the Passed