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How would each of the following changes affect the demand curve for acupuncture? a

Economics Dec 18, 2020

How would each of the following changes affect the demand curve for acupuncture? a. The price of an acupuncture session increases. b. A reduction in back problems occurs as a result of sessions on stretching on a popular television show. c. Medicare reduces the copayment for acupuncture from $20 to $10. d. The surgeon general issues a warning that back surgery is ineffective. e. Medicare stops covering back surgery.

Expert Solution

Here,

For option a:

If price increase, the demand curve decrease along the same curve

For option b:

TV show is helpful.It is a substitute so the demand curve shifts to the left

For option c:

If medicare reduces, demand shifts to the right

For option d:

If back surgery is ineffective then people move to acupuncture and demand shifts to the right

For option e:

If medicare stops covering back surgery, this means that substitute is more expensive. This shifts the demand curve to the right because accupuncture is more in demand now.

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