Answer to Question #309020 in Microeconomics for bez

Question

What is demand? What does it mean supplier-induced demand? What makes this type of

demand different from other types of demand? Explain the reasons why supplier induced

demand is common in the health care market.

Answer 1

Demand is the quantity of a good or service that consumers are willing and able to buy at various prices for a given period of time.

In healthcare, supplier induced demand is the amount of demand that exists beyond what would have occurred in a market in which patients are fully informed.

Traditional demand is determined by the consumer's willingness and ability to pay while supplier induced demand is for products that have no substitutes.

Supplier induced demand is common in healthcare because physicians can manipulate their patients' demand for medical services to increase the utilization of health care.