Use the following to answer question(s): The Market for Health Care

-(Exhibit: The Market for Health Care) Suppose insurance lowers the price consumers pay to P₂.Compared to the situation without insurance, this would:
A) reduce the equilibrium price to P₂.
B) reduce the quantity demanded to Q₁.
C) increase the quantity demanded to Q₂.
D) have no effect on quantity demanded.

Question

Use the following to answer question(s): The Market for Health Care
 
-(Exhibit: The Market for Health Care) Suppose insurance lowers the price consumers pay to P₂.Compared to the situation without insurance, this would:
A) reduce the equilibrium price to P₂. 
B) reduce the quantity demanded to Q₁. 
C) increase the quantity demanded to Q₂. 
D) have no effect on quantity demanded.

Quizplus · Accepted Answer

When insurance lowers the price to P₂, it makes health care more affordable and accessible to consumers. This means that more people would demand health care services, resulting in an increase in quantity demanded to Q₂. Therefore, the correct answer is C.

Use the Following to Answer Question(s): the Market for Health