Question

Refer to the figure below to answer the following question.

If average real income in the community increases, the demand curve for inpatient hospital services shifts to the right from D1 to D2. The equilibrium price will increase from P1 to P2 and the equilibrium quantity will increase from Q1 to Q2.

TRUE OR FALSE

Refer to the figure below to answer the following questio If average real income in the community increases, the demand curve for inpatient hospital services shifts to the right from D1 to D2. The equilibrium price will increase from P1 to P2 and the equilibrium quantity will increase from Q1 to Q2. P1 D2 D1 001 2

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Answer #1

True

Explanation: Since the supply curve remains unchanged, a rightward shift in the demand curve would result in an increase in both the equilibrium quantity and price.

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