Other things equal, and given that the elasticity of demand for health care is 0.2, a 10 percent increase in the price of health care in the United States will reduce the quantity of health care demanded by about

Question

Quizplus · Accepted Answer

The elasticity of demand is 0.2, meaning a 1% increase in price leads to a 0.2% decrease in quantity demanded. Therefore, a 10% increase in price will lead to a 2% decrease in quantity demanded (10% * 0.2 = 2%).

Other Things Equal, and Given That the Elasticity of Demand