-Refer to the above figure. Medicare subsidies have increased the price of medical services to Ps. Which of the following statements is TRUE about the effect the Medicare subsidy has had on the consumption of medical services?
A)The amount of medical services provided has decreased from Q₀ to Qd as a result of the subsidy.
B)The amount of medical services provided has increased from Q₀ to QM as a result of the subsidy.
C)The amount of medical services provided has increased from Qd to QM as a result of the subsidy.
D)The amount of medical services provided has remained unchanged as a result of the subsidy.

Question

-Refer to the above figure. Medicare subsidies have increased the price of medical services to Ps. Which of the following statements is TRUE about the effect the Medicare subsidy has had on the consumption of medical services?
A)The amount of medical services provided has decreased from Q₀ to Qd as a result of the subsidy. 
B)The amount of medical services provided has increased from Q₀ to QM as a result of the subsidy. 
C)The amount of medical services provided has increased from Qd to QM as a result of the subsidy. 
D)The amount of medical services provided has remained unchanged as a result of the subsidy.

Quizplus · Accepted Answer

The Medicare subsidy has increased the demand for medical services, leading to an increase in the quantity of medical services provided from Q₀ to QM.

-Refer to the Above Figure