As governor,Marcy has decided that anyone who works but earns less than $20,000 a year will have their health insurance premiums paid for by the government.How does this affect the equilibrium price and quantity of medical services?

Question

Quizplus · Accepted Answer

By covering health insurance premiums for low-income workers, the government effectively increases the demand for medical services among this group, as they are now more able to afford these services. Since the supply of medical services remains unchanged, the increased demand leads to a rise in both the equilibrium price and quantity of medical services.

As Governor,Marcy Has Decided That Anyone Who Works but Earns