Supply curve of medical services is perfectly inelastic

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Suppose the supply curve of medical services is perfectly inelastic. What is the shape of supply curve (e.g. vertical, horizontal, upward sloping)? Please also analyze the impact of an increase in consumer income on the market price and quantity of medical service.

In your opinion, does the Houston Medical Center, in which many hospitals gather, represent an example of perfect competition, monopolistic competition, collusive oligopoly, or competitive oligopoly? Explain your answer in the language of economics.

Explain the economic reasoning underlying the following statement: “People often fail to acquire information about the price they pay for medical services because of health insurance.” How the “imperfect” information about price hurt the health care market? Please cite a reference link (URL) to an article which supports your answer.

Reference no: EM131007691

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