The Table Gives Supply and Demand Data for a Certain

question 146

Multiple Choice

The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays two-thirds of the equilibrium price, the immediate price to the consumer and quantity of health care demanded would be

• A)$3,000 and 7,000.
• B)$4,000 and 10,000.
• C)$1,000 and 16,000.
• D)$2,000 and 11,000.

---

Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a stable market condition.

Increasing-Cost Industry

An industry where production costs increase as the industry's output increases, often due to resource limitations or other scaling challenges.

Economic Profits

Profits exceeding the normal return on investment, calculated by subtracting both explicit and implicit costs from total revenues.

Industry Expansion

The process of a sector growing in size, output, or number of entities, often due to increased demand or technological advancements.