The Figure Given Below Represents Demand for and Supply of Hospital

question 32

Multiple Choice

The figure given below represents demand for and supply of hospital beds in Anytown,U.S.A.,as shown by curves D and S₁ in the following figure.If the hospital receives permission to expand,its new supply curve will be S₂.Price level P₁ is the fixed prospective payment reimbursement rate paid by Medicare to the hospital,regardless of actual cost. Figure 18.3

-According to Figure 18.3,the surplus of beds caused by the fixed reimbursement rate,before the hospital expansion,is the difference between _____ and _____.

• A)Q₂; Q₁
• B)Q₄; Q₁
• C)Q₄; Q₂
• D)Q₃; Q₁
• E)Q₃; Q₂

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