An increase in price for healthcare services or automobiles reduces demand making the curve shift to the left side. Similarly, an increase in income enables consumers to pay for cars or healthcare services, increasing their demand. Therefore, the curve shifts to the right upon increased customer income. Finally, an increase in price for substitutes services and goods increases the demand for alternatives, making their curves shift to the right.
Although price, substitutes, complements, and income influence the demand for healthcare services, there are exceptions where these factors do not influence the demand for services. According to Folland, Goodman & Stano (2017), patients may ignore the impact of increased prices for healthcare services because health is an investment rather than an expense.
In this sense, people are willing to pay for services regardless of their prices when the need arises. This factor renders healthcare services inelastic, meaning the demand curve would not shift to the left even after increasing the price of services. Conversely, the automobile industry is highly elastic, meaning customers make trade-offs and consider options following upsurging prices that make the demand curve shift to the left.
Supply refers to the number of goods and the nature of services available to customers at a given price for a particular time. Healthcare providers such as drug manufacturers and caregivers determine supplies depending on various factors, including technological change, inputs price, industry size, insurance coverage, and prices of production-related goods (Folland, Goodman & Stano, 2019, p. 61).
On the other hand, technological changes, input prices, and production-related goods determine the supply of automobiles. Although these industries share factors that influence the supply of goods and services, the healthcare sector contains additional aspects, including coinsurance and indemnity insurance that reduce out-of-pocket expenses, affecting the subsequent supplies.
">A demand curve illustrates healthcare services and automobiles in a hypothetical market for a given period. In this sense, it is possible to determine the interactions between factors that influence customers’ ability to pay for services or goods. When comparing the demand curve for healthcare services and automobiles, it is essential to note the similarities and differences between the two industries.
As earlier stated, the healthcare sector sometimes circumvents these basic principles of economics because of the underlying factors such as the role of government in controlling prices, insufficient information by customers, insurance, and the perception of health as an investment. However, the two Industries share various factors that influence demand.
An increase in price for healthcare services or automobiles reduces demand making the curve shift to the left side. Similarly, an increase in income enables consumers to pay for cars or healthcare services, increasing their demand. Therefore, the curve shifts to the right upon increased customer income. Finally, an increase in price for substitutes services and goods increases the demand for alternatives, making their curves shift to the right.
Although price, substitutes, complements, and income influence the demand for healthcare services, there are exceptions where these factors do not influence the demand for services. According to Folland, Goodman & Stano (2017), patients may ignore the impact of increased prices for healthcare services because health is an investment rather than an expense.
In this sense, people are willing to pay for services regardless of their prices when the need arises. This factor renders healthcare services inelastic, meaning the demand curve would not shift to the left even after increasing the price of services. Conversely, the automobile industry is highly elastic, meaning customers make trade-offs and consider options following upsurging prices that make the demand curve shift to the left.
Supply refers to the number of goods and the nature of services available to customers at a given price for a particular time. Healthcare providers such as drug manufacturers and caregivers determine supplies depending on various factors, including technological change, inputs price, industry size, insurance coverage, and prices of production-related goods (Folland, Goodman & Stano, 2019, p. 61).
On the other hand, technological changes, input prices, and production-related goods determine the supply of automobiles. Although these industries share factors that influence the supply of goods and services, the healthcare sector contains additional aspects, including coinsurance and indemnity insurance that reduce out-of-pocket expenses, affecting the subsequent supplies.
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