Use the following to answer question(s): Third-Party Payers

-(Exhibit: Third-Party Payers) Suppose insurance lowers the price consumers pay to $20 per visit.Compared to the situation without insurance, this would:
A) reduce the equilibrium price to $20.
B) reduce the quantity demanded to 2 million visits per week.
C) increase the quantity demanded to 3 million visits per week.
D) do none of the above.

Question

Use the following to answer question(s): Third-Party Payers
 
-(Exhibit: Third-Party Payers) Suppose insurance lowers the price consumers pay to $20 per visit.Compared to the situation without insurance, this would:
A) reduce the equilibrium price to $20. 
B) reduce the quantity demanded to 2 million visits per week. 
C) increase the quantity demanded to 3 million visits per week. 
D) do none of the above.

Quizplus · Accepted Answer

With insurance lowering the price consumers pay to $20 per visit, the quantity demanded is likely to increase due to the reduction in price. This would shift the demand curve to the right, resulting in an increase in equilibrium quantity demanded. Hence, the equilibrium quantity demanded would increase to 3 million visits per week.

Use the Following to Answer Question(s): Third-Party Payers