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Healthcare Economics - Case Study Example

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Before we discuss the idea of medical care as a derived demand, someone has to define the word of “Derived demand” properly. The word defines a term in economics, as demand for one good or service happens as a result of the demand of another good or service…
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Healthcare Economics
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Healthcare Economics

Download file to see previous pages... It is therefore apparent that the answer of the said question applies the same. It is easy to measure of effects of smoking on individuals than to measure the effects of antismoking campaigns on health. You cannot measure the effects of antismoking campaigns on health before measuring the effects of smoking on individuals. Measuring the effects of smoking on individuals is what derived the antismoking campaigns. Knowing the effects of smoking on individuals led to a derived demand of anti-smoking campaigns on Health, once the effects of smoking on individuals is measured then the need of antismoking campaigns arises and that is what positively contributes to health. Therefore, without measuring smoking effects on individuals, it is hardly possible to know even whether there is a need of antismoking campaigns because it is not assured how harmful it is for the individuals. Through having a price elasticity of less than 1, supply is not so sensitive to prices and based on the high-income target market of individuals with $250,000 per annum. Ideally, a price increase for a luxury maternity unit will still be viable and there is bound to be a sure market for the good. With a decrease in income, the income elasticity of demands is bound to change. It will be grater than 1 thus implying that demand for a good becomes more sensitive to a change in income. This only happens in an ideal environment but the economy is always sensitive to changes and employers who are profit minded would go for better pay to their employees. ...Download file to see next pagesRead More
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