With the help of appropriate diagrams, explain how each of these situations will affect the demand curve for inpatients service at a hospital in a large city:   In an attempt to cut costs, the largest employer in the area increases the coinsurance rate for employee health care coverage from 10 percent to 20 percent.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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With the help of appropriate diagrams, explain how each of these situations will affect the demand curve for inpatients service at a hospital in a large city:

 

In an attempt to cut costs, the largest employer in the area increases the coinsurance rate for employee health care coverage from 10 percent to 20 percent.

 

image provided is from my note and  how the curve should be.. and it should be anti clockwise

FIGURE 5-4
The Demand Curve for Physician Visits with Coinsurance
Price per visit
dwi
Nominal"
demand
dwo
$250
"Effective"
demand
$50
Office visits
per year
(q)
Transcribed Image Text:FIGURE 5-4 The Demand Curve for Physician Visits with Coinsurance Price per visit dwi Nominal" demand dwo $250 "Effective" demand $50 Office visits per year (q)
-Reduction in coinsurance rate will
rotate the demand curve Dwi clockwise
and pivot off the point where Dwo
crosses the horizontal axis
Transcribed Image Text:-Reduction in coinsurance rate will rotate the demand curve Dwi clockwise and pivot off the point where Dwo crosses the horizontal axis
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