Government subsidized medical care results in inefficiently high levels of demand for medical care.

Question

Quizplus · Accepted Answer

When medical care is subsidized by the government, patients are facing lower costs or co-payments, which can lead to an increase in demand for medical services. If the price of medical care is lower than the market equilibrium, there will be an inefficiently high level of demand for medical care, resulting in longer waiting times, higher costs, and lower quality medical services.

Government Subsidized Medical Care Results in Inefficiently High Levels of Demand