Discuss this statement: "Health care is too expensive. The government should limit the prices doctors charge so that everyone can afford health care."
Setting a price ceiling for medical care that is below its equilibrium price will result in excess demand.
Quantity demanded will increase, while at the same time, fewer units of medical care will be supplied at the
price ceiling than at the equilibrium price.
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If the home nation allows free trade but imposes a tariff on a product currently produced by a home firm monopoly, what is the outcome?
a. The home firm then will regain its monopoly control over the price. b. The home firm will be able to charge a higher price (world price + tariff), but it will become a price taker, just like a competitive firm. c. The home nation's firm will be able to limit quantity and charge a higher price. d. The monopoly firm will lower price, increase sales, and undercut the foreign competition.
The internal rate of return of a project can be found by
A) discounting all cash flows at the cost of capital. B) averaging all cash inflows, and calculating the interest rate, which will make them equal to the average investment. C) calculating the interest rate, which will equate the present value of all cash inflows to the present value of all cash outflows. D) None of the above