Income and the Price Elasticity of Demand for Medical Care

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Income and the Price Elasticity of Demand for Medical Care. Like many other developing? nations, Peru subsidizes medical? care, charging consumers a small fraction of the cost of providing services such as visits to medical clinics. The price elasticity of demand for medical care is 0.67 for poor households but only 0.03 for wealthy households. Suppose the government reduced its subsidies for medical? care, and the price to consumers increased by 1010

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