Exhibit 6-19 Refer to Exhibit 6-19, which is a demand curve for Medicare benefits.A $1 payment for services would reduce utilization, yet would still leave beneficiaries with a substantial consumer surplus.

Question

Exhibit 6-19  Refer to Exhibit 6-19, which is a demand curve for Medicare benefits.A $1 payment for services would reduce utilization, yet would still leave beneficiaries with a substantial consumer surplus.

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The demand curve shows that at a price of $1, the quantity demanded is lower than at a price of zero (i.e. there is a negative slope to the curve), indicating that some beneficiaries would reduce their utilization of Medicare services in response to a small out-of-pocket cost. However, the curve still intersects the vertical axis at a positive value, indicating that even at a price of $1, there is still some consumer surplus left for beneficiaries.

Exhibit 6-19 Refer to Exhibit 6-19, Which Is a Demand