The major economic effect of Medicare subsidies is
A) that the number of physicians has decreased since compensation is low.
B) to increase the price of medical services and reduce the quantity demanded.
C) to increase the price of medical services and increase the quantity demanded.
D) to lower the price of medical services and reduce the quantity demanded.
C
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Which of the following is NOT true of monopolistic competition?
A) Firms produce a good that is a perfect substitute for their competitors' goods. B) There is free entry and exit. C) There are a large number of firms. D) Firms can compete on price and quality.
From the late 1960s to the late 1990s, the share of GDP devoted to government purchases
A) drifted gradually upward. B) drifted gradually downward. C) remained fairly steady. D) increased, but only after the onset of a war or a military buildup.