What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery?
A)Demand will decrease,but this will not shift the supply curve.
B)Supply will decrease,but this will not shift the demand curve.
C)Demand and supply will both decrease.
D)Demand will decrease and supply will increase.

Question

Quizplus · Accepted Answer

If insurance companies cover a smaller portion of the cost of knee replacement surgery, patients will have to pay more out-of-pocket. This makes the surgery less affordable for some, leading to a decrease in demand. The supply curve, which represents the willingness and ability of producers to offer goods at different prices, would not be directly affected by this change in insurance coverage.

What Would Happen in the Market for Knee Replacement Surgery