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Complete 4 page APA formatted essay: Demand and Elasticity in Health Care.Complementary goods or services on the other hand possess lower price elasticity.The meaning of price elasticity of demand is
Complete 4 page APA formatted essay: Demand and Elasticity in Health Care.
Complementary goods or services on the other hand possess lower price elasticity.
The meaning of price elasticity of demand is that the demand elasticity for any product (healthcare goods and services) which makes up higher proportions of income also remains generally optimal due to the increase in the price of the commodity which curtails further consumption expenditures on other products.
Given that the elasticity of demand refers to a measure of responsiveness that consumers exhibit towards a given product demand as a result of adjustments in the price of these commodities, it must also be true that price elasticity of demand for healthcare services must coincide with health status. This means that health status becomes useful when studying price elasticity of demand. By looking at price elasticity of demand in light of health status, one is able to focus on absolute magnitude of changes, instead of the relative ones.
One of the reasons why price elasticity of demand and health status relate is because healthcare is only valued to the extent it betters health. Likewise, it is an obvious fact that the demand for healthcare heavily depends on income, education, health status and age. Despite the demand for healthcare being ultrasensitive to income and prices, the value of price elasticities have values that range from 0 to -1. Likewise, the degree of utilization of healthcare services is shown to be not only tied to income, but also to be very good at the individual level of response (Dewar, 2010).
Giving respect to the relationship between price elasticity of demand for health care and health status on the other hand helps in making comparisons on different demand responses across different individuals, countries and products.
It is most probable that increase in educational attainment in the community will increase the demand for healthcare services.
