Question

how does the elasticiity of supply influence how a higher demand for medicare gets translated into more medical care rather than into a higher price for medical care

Answer 1

The elasticity of supply is generally the time period the in which the suppliers can respond to a higher demand i.e. how soon they can increase the supply in case of a price rise. If the supply is very elastic with an increase in demand and rise in price the supply will increase immediately and the price will remain low. If the supply is inelastic i.e. it takes a lot of time for the suppliers to increase the supply in response to the increased demand the price of the product will rise.

Conclusion: If the elasticity of the Medicare supply is high the increased demand will not lead to an increase in the price because then the demand will be met with equal supply but if the supply is inelastic it will take a lot of time for the suppliers to increase the supply in response to excess demand and it will increase the price.