-Refer to the above figure. Medicare subsidies have increased the price of medical services to Ps. The quantity demanded of medical services is
A) QM.
B) Q0.
C) Qd.
D) undetermined without more information.

Question

-Refer to the above figure. Medicare subsidies have increased the price of medical services to Ps. The quantity demanded of medical services is
A) QM. 
B) Q0. 
C) Qd. 
D) undetermined without more information.

Quizplus · Accepted Answer

Medicare subsidies have increased the price of medical services, which will lead to a decrease in the quantity demanded. The new equilibrium quantity will be at Qm, where the new supply curve (S1) intersects the demand curve (D).

-Refer to the Above Figure