As governor, Lynda has decided to balance the budget by reducing the number of people for whom the government provides health care. How does this affect the equilibrium price and quantity of medical services?

Question

Business

Patches

19 June, 01:53

As governor, Lynda has decided to balance the budget by reducing the number of people for whom the government provides health care. How does this affect the equilibrium price and quantity of medical services?

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Answers (1)

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Mo · Answer 1

Affects directly to increase the quantity of medical services and decrease the costs.

Explanation:

This is an cause-effect theory case, because giving heath care to people takes a lot of money, if the budget is overdrawn reducing the number of people is a way to balance, because every budget is settled for certain amount of people. So, the more people is provided health care, the lest budget is available for it. If Lynda reduce the number of people, there's gonna be more health products and services available. That's why affects directly.