In this chapter, students will be able to understand: What does the demand curve for health care look like? What is the copayment rate? What effect does the copayment rate have on the quantity of health care demanded? | Appendix Chapter 4 Applying Supply and Demand Analysis to Health Care ©2000 South-Western College Publishing What does the demand curve for health care look like? It is downward sloping just as there is for other goods and services * What does the supply curve for health care look like? It is upward sloping just like the supply for other goods and services * P2 Q1 S The Supply & Demand for Health Care P Q P1 P3 Q2 Copayment Q D A C B * What is the copayment rate? The percentage of the cost of services consumers pay out of pocket * What effect does the copayment rate have on the quantity of health care demanded? It increases the quantity demanded because people pay on average only 20% of the cost * What can cause shifts in the demand for health care? A change in . Number of buyers Tastes and preferences Income Prices of substitutes * D1 D2 The effect of an increase in demand on market equilibrium for health care P1 S E2 E1 P2 Q1 Q2 * D1 D2 The effect of a decrease in demand on market equilibrium for health care S E2 E1 P2 P1 Q2 Q1 * Increase in demand Increase in equilibrium price Increase in quantity supplied * Decrease in demand Decrease in equilibrium price Decrease in quantity supplied * What can cause shifts in the supply for health care? A change in . Number of sellers Resource prices * D The effect of a decrease in supply on market equilibrium for health care S1 E1 E2 S2 P2 P1 Q1 Q2 * D The effect of a decrease in supply on market equilibrium for health care S2 E2 E1 S1 P1 P2 Q2 Q1 * Increase in supply Decrease in equilibrium price Increase in quantity demanded * Decrease in supply Increase in equilibrium price Decrease in quantity demanded * . | Appendix Chapter 4 Applying Supply and Demand Analysis to Health Care ©2000 South-Western College Publishing What does the demand curve for health care look like? It is downward sloping just as there is for other goods and services * What does the supply curve for health care look like? It is upward sloping just like the supply for other goods and services * P2 Q1 S The Supply & Demand for Health Care P Q P1 P3 Q2 Copayment Q D A C B * What is the copayment rate? The percentage of the cost of services consumers pay out of pocket * What effect does the copayment rate have on the quantity of health care demanded? It increases the quantity demanded because people pay on average only 20% of the cost * What can cause shifts in the demand for health care? A change in . Number of buyers Tastes and preferences Income Prices of substitutes * D1 D2 The effect of an increase in demand on market equilibrium for health care P1 S E2 E1 P2 Q1 Q2 * D1 D2 The effect of a decrease in demand on market equilibrium for health care S E2 E1 P2 P1 Q2 Q1 * Increase in demand Increase in equilibrium price Increase in quantity supplied * Decrease in demand Decrease in equilibrium price Decrease in quantity supplied * What can cause shifts in the supply for health care? A change in . Number of sellers Resource prices * D The effect of a decrease in supply on market equilibrium for health care S1 E1 E2 S2 P2 P1 Q1 Q2 * D The effect of a decrease in supply on market equilibrium for health care S2 E2 E1 S1 P1 P2 Q2 Q1 * Increase in supply Decrease in equilibrium price Increase in quantity demanded * Decrease in supply Increase in equilibrium price Decrease in quantity demanded * END
