What Would Happen to the Price and Quantity of Medical

question 77

Multiple Choice

What would happen to the price and quantity of medical services if a new doctor's office opened in a small town?

• A) Equilibrium price and quantity would rise because both supply and demand would increase.
• B) Equilibrium price and quantity would fall because both supply and demand would decrease.
• C) Equilibrium price and quantity would rise because demand would decrease and supply would remain constant.
• D) Equilibrium price would fall and quantity would rise because supply would increase and demand would remain constant.
• E) Equilibrium price and quantity would fall because demand would decrease and supply would remain constant.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as more units are produced.

Long-Run Supply

A period sufficient for all inputs to production, including capital, to be varied, allowing for adjustments to changes in demand or technology.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.

Long-Run Equilibrium

A state in which all factors of production and economic variables are in balance, with no external pressures forcing change.