From the information in tables 3 and 4, construct the new aggregate supply and d

Question

From the information in tables 3 and 4, construct the new aggregate supply and demand curves for PCP visits in this market. What is the final market clearing price and visit quantity? Again, in plain English, what has happened?

Number of visits/year Table 3 Price/visit Empl 1 Empl 2 Empl 3 Empl 4 Empl 5 Empl 6 Empl 7 Empl 8 Empl 9 Empl 10 $50 170 $60 160010130170 190 145163140 $701 150 140 180200155162173 150 120 160 180135 142153 110 150170125132143 100 140160115122133 90 130150 105112 123 5102113 103 93 80 140 120 110 100 $90130 s 100 1201 $110 1101 $120 100 $130 901 80 120140 70 110 130 60 100 120 50 90110 6572 8 85 75 92 140 80 After another year, new measurements are taken, and we see that the demand for services has indeed settled into that predicted in Table 3 above. We also note that physicians' willingness to supply services at various price points has shifted. The table below shows how: Table 4 Price/visit PCP 1 PCP 2 PCP 3 PCP 4 PCP 5 PCP 6 PCP 7 PCP 8 PCP 9 PCP 10 $50 80 $60 90 $70 100 $80 110 Number of visits/year 675557101 067111 70 75 77 1211 87 131 971 141 70 $90 120 100 110 120 130 140 150 95 100 100 110 117 105 110 107 1511 1271 115 1201 117 137| 125| 130| 127| 171 147 135 140137181 157 145 150147 S 100 130 110 140 1 161 $120 150 $130 160 $140 1701 140 Question #3-From the information in tables 3 and 4, construct the new aggregate supply and demand curves for PCP visits in this market. What is the final market clearing price and visit quantity? Again, in plain English, what has happened? Question #4-From the initial state to the final state, is the community better off? what arguments could you give for or against this position?

Explanation / Answer

To find the demand and supply curve, we have to find the aggregate demand and supply at each price

The aggregate demand and supply for each price is

Plotting these demand and supply against the price, we get the demand and supply curves. The equilibrium price is 100 and the equilibrium quantity demanded and supplied is 1200

Price Demand Supply 50 1700 700 60 1600 800 70 1500 900 80 1400 1000 90 1300 1100 100 1200 1200 110 1100 1300 120 1000 1400 130 900 1500 140 800 1600

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