Use the Following to Answer Questions

question 23

Multiple Choice

Use the following to answer questions .
Exhibit: The Market for Health Care
-(Exhibit: The Market for Health Care) At price P₃ the total cost of health-care services compared to price P₁ has increased from:

• A) OP₃BQ₂ to OP₁AQ₂.
• B) OP₁AQ₁ to OP₃BQ₂.
• C) OP₃BQ₂ to OP₁AQ₁, and consumers pay OP₁AQ1₂.
• D) OP₁AQ₁ to OP₃BQ₂, and insurance pays OP₂CQ₂.

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Definitions:

Required Units

The quantity of products or services that must be produced or sold to meet a specific target or fulfill a certain demand.

Variable Expenses

Costs that change in proportion to the activity or volume of operations in a business.

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

Sales

The total amount earned from selling goods or services over a particular period, usually before any expenses are deducted.