Question

Why is the demand for healthcare a derived demand? A primary care physician has to increase...

Why is the demand for healthcare a derived demand?

A primary care physician has to increase her office's average visit price by 5 percent due to higher practice expenses, including the need to provide staff wage increases to remain competitive. Will total revenues increase or decrease as a result of this action? Discuss the concept of price elasticity to substantiate your answer.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Derived demand refers to those goods which are demanded by you from consumer as well as producer perspective. You as a consumer needs good health while you as a producer needs good health such that you can work more and earn more. This connection between demand of healthcare to supply more of goods produced by is you is derived demand.

Demand for healthcare is inelastic (whose demand remains the same or not change by large when price changes) as even though price rises by large, patients will go to doctors to treat themselves. If doctor raises visit price by 5%, its total revenue is going to rise as patients will still go to doctors and pay high visit fee.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An insurance company has a copayment of $20 for a primary care visit and $30 for...
An insurance company has a copayment of $20 for a primary care visit and $30 for a specialist visit. This year there were 400,000 primary care visits and 600,000 specialist visits with these copayments. For each primary care visit the insurance company pays $100 in claims. For each specialist visit, the insurance company pays $150 in claims. a. The company is considering raising the specialist copayment to $35. Based on the literature, the price elasticity of demand for specialist visits...
1) (10 marks) Which of these factors would shift the labor demand curve out (increase labor...
1) Which of these factors would shift the labor demand curve out (increase labor demand)? a) Decrease in immigration into the United States. b) Increase in immigration into the United States c) Price of output good increases (labor is used to make this output). d) Price of output good decreases (labor is used to make this output). 2) If the marginal revenue product of labor is greater than the wage rate (M RPh > w), what should a profit maximizing...
Your group is responsible for ensuring that the acquisition of the Primary Care Provider Clinic is...
Your group is responsible for ensuring that the acquisition of the Primary Care Provider Clinic is successful. Changes must be initiated that enhance employee productivity and support the clinic in showing a positive financial gain. As part of your responsibilities, you are charged with coming up a plan of action to initiate change, help employees transition, and ensure that the effects of the change become long lasting. Create a PowerPoint presentation (12-15 slides, including your References slide) to illustrate your...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the...
On a graph of a demand curve, total consumer surplus equals:     A-the demand curve. B-the area above the demand curve and beneath the market price. C-the market price. D-the area beneath the demand curve and above the market price. Total producer surplus equals:     A-the area above the supply curve and beneath the market price. B-the area beneath the supply curve and above the demand curve. C-the market price. D-the supply curve. An increase in supply refers to:    ...
What is Medicare Part C? Provides the aged with home health care Provides the aged with...
What is Medicare Part C? Provides the aged with home health care Provides the aged with prescription drugs Enables low-income aged to participate in Medicaid Provides a voluntary managed care option for the aged How is Medicaid financed? It is financed entirely by the federal government. It is financed entirely by the state. States receive the same percentage of federal support. States with lower per capita incomes receive a greater percentage of federal support If a healthcare system is "free"...
37) Price per Constant- Quality of X Quantity of X Demanded per Time Period Quantity of...
37) Price per Constant- Quality of X Quantity of X Demanded per Time Period Quantity of X Supplied per Time Period $10 0 150 8 20 120 6 40 90 4 60 60 2 80 30 0 100 0 Based on the table above, if other influences remain constant and the market is free to adjust, a stable equilibrium price will be established at Select one: a. $4. b. $6. c. $8. d. $2. A shortage will occur when Select...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods to those in need. [2] Dealing with affluence in a morally bankrupt world. [3] Using scarce resources to satisfy unlimited human wants. [4] Reducing human wants to eliminate the problem of scarcity. 2. Computer software represents [1] labour. [2] land. [3] capital. [4] entrepreneurship. 3. Suppose you have graduated with a degree in accounting and are offered a job with an accounting firm. But...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the consumer's gain from exchange c.the market price of a good or service d. the equilibrum quantity 3. trade permitts countries to a. consume more than they capable of producing b.produce based on their comparative advantage c.specialize more fully d.all of above 4. which of the following dose not impact how elastic supply is? a. whether the supply is local or global b.the share of...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the marginal cost of the last unit sold. II. A monopolist with positive marginal costs and facing a linear demand curve always sets a quantity (or price) such that it sells on the elastic section of the demand curve. III. A monopolist regulated by marginal-cost pricing regulation sells at a price that covers its variable and fixed costs of production, but it still causes a...
_____ 1. According to the benefit principle of taxation: a. taxes should be distributed according to...
_____ 1. According to the benefit principle of taxation: a. taxes should be distributed according to peoples’ ability to pay. b. the progressive income tax represents the ideal way of distributing taxes among a nation’s citizens. c. user charges are an ideal source of finance for government-produced goods and services. d. flat-rate taxes are the only fair type, since all citizens benefit equally from provision of public goods. _____ 2. If horizontal equity is achieved in taxation: a. individuals of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT