Price Elasticity

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Price Elasticity

Category: Coursework

Subcategory: Health

Level: College

Pages: 1

Words: 550

Price Elasticity and Healthcare
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Price Elasticity and Healthcare
When discussing the concept of price elasticity in healthcare we are looking at the change in demand that is, the number of people who will seek healthcare as the price increases or reduces. Price elasticity shows how the demand for a consumer changes as the prices change. For example, the price elasticity of health care is explained as the quantity of medical care that is demanded divided by the difference in percentage in the price of the same commodity. Price elasticity of health care is between 0 and -1. It means that the demand for the healthcare services can reduce when the price that the patients have to pay for the services rise. Hence, the apparent conclusion that healthcare is inelastic.
The world leaders are now faced with the increasing cost of healthcare and are discussing the methods in which they will reduce expenditures. Various externalities affect the concept; for instance, some people frequently visit the doctor because they are very sick or have good medical insurance. For the essential services like maternity, outpatient services and ambulance services the prices are relatively stable despite the income differences among various individuals (Yu, 2016). That is to say, the spending for essential commodities is the same for both high and low-inc…

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