Rapidly increasing health costs have been a major political concern since at least 1992. Suppose the government sets the maximum price for a normal doctor's visit at $20 to control rising health costs but the current market price is $40. What will happen

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Business

Nathanael

31 January, 10:49

Rapidly increasing health costs have been a major political concern since at least 1992. Suppose the government sets the maximum price for a normal doctor's visit at $20 to control rising health costs but the current market price is $40. What will happen

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Dominique Reid · Answer 1

A. More people will try to visit the doctor, but there will be fewer doctors willing to see patients at that price.

Explanation:

Since the government decides to impose a price ceiling that is below the market price, the number or the demand of people willing to see the doctors will increase exponentially as a result. Invariably, the number of doctors willing to see patients at the price lower than the market price will reduce. When government imposes price ceiling on goods and services like this, they assume the market prices to be too high, hence too expensive for the consumers to afford. Of course, with reduction in price comes an increase in demand, but the producers or the people that offers the services wouldn't want to render those services or sell those goods below market prices.