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price elasticy of demand of healthcare - Assignment Example
Author : rachel82
Finance & Accounting
Pages 3 (753 words)
Answer 1: Price elasticity of demand is used to measure the relationship between the changes in the quantity demanded of a particular product due to change in its price. In economics the term price elasticity of demand is used to discuss the price sensitivity…
Price elasticity coefficient ranges from less than 0 to coefficient >1. As the elasticity coefficient moves from negative to positive domain no response in terms of change in demand will be noticed due to change in price. As the coefficient moves away from zero change in quantity demanded is noticed with change in price. Answer 2: To understand the impact of health status on the price elasticity of demand for health care the understanding should be developed about the different levels of health status. In the case, if the person is in the dying position or has some serious illness that requires special cure then the price factor will not be considered and the price elasticity of demand will be perfectly inelastic. On contrary, the price elasticity for general physician services for routine checkups or prescriptions is relatively elastic. Increase in price of general physician will reduce demand unless necessary otherwise. Hence changes in health care status have varying impact on the price elasticity of demand for health care (Ringel, Hosek, Vollaard, & Mahnovski, 2002). Answer 3: The education has become the necessity for every community to survive sustainably in the continuously changing environment. Education is very much influential in every aspect of life. The education also plays a vital role in the demand of health care in the society. ...