Assignment:
Introduction:
Briefly summarize the purpose of your paper by introducing the case (the situation) that you are analyzing and studying, and what are you trying to achieve from your study.
Section 1: Demand Determinants
Discuss these issues as they specifically apply to your situation:
A: Determinates
- Population:
- Income:
- Cost of Related Goods:
- Taste:
- Expected Future Prices:
For example- On population, discuss demographic changes, particularly the changes in the size of the aging population in the US and the projection of this change since it has a direct effect on demand for healthcare and doctors, On income discuss the changes in income growth since an increase in income causes a rise in demand for all commodities, including healthcare. On cost of related goods you can discuss how the implementation of the Affordable Care Act, which offers a substitute to conventional health insurance, has changed demand for healthcare. On tastes you can discuss how changes in attitude toward healthy life style have affected demand for preventative healthcare., on expected future prices - if they are anticipated to rise what would be the impact- see the sections of the text here to point how these determinates would impact elasticity.
B: Price Elasticity of Demand
Discuss if demand is either price elastic or price inelastic.
First, start by discussing the factors that determine the level of elasticity of a commodity such as:
-Availability of Close Substitutes
-Passage of Time
-Whether Good is Luxury or Necessity
-Market Definition
-Consumer Budget Share
For example on availability of substitutes- there is likely no viable substitute for modern healthcare, as time passes how does this impact elasticity, on type of commodity, clearly medical care is a necessity for the most part how does market definition apply here, given that medical care is likely a high ticket item that would likely take a high percentage of budget share- what is the impact- See this section of the text to point how these issues impact elasticity.
Second, calculate the Price Elasticity of Demand. Use two periods ( say 2013 - 2014) and find data about overall demand for health care for those two years and well as the average price of health care. Then use this data to calculate elasticity of demand using the Midpoint Formula. Then interpret the result. If the result is less than 1, then demand is price inelastic, If the result is more than 1, price is elastic. Again discuss implications.
The references provided in the project paper should help with these numbers
C: Graph of Demand
You can use the same data obtained for the Price Elasticity of Demand (the above section) to construct a simple demand curve.
Section 2: Supply Determinants
Discuss these issues as they specifically apply to your situation:
A: Determinates
-Prices of Inputs:
-Technological Change:
- Price of Substitutes:
-Number of Firms:
- Expected Future Prices:
- Cost of Production: In this case we would be looking at the cost of medical school over time and the implications
On suppliers, you can use data to show the number of doctors entering the industry every year, also the number of doctors exiting the industry (retiring) each year. You can also support your discussion with findings from other studies about the shortage (or surplus) of doctors and the projected shortage (or surplus) in the future. On cost of production (inputs) you can simply discuss the trends in the cost of medical school over time (use data for 5 years) to show how (or if) the cost of education has been rising, remaining the same, or declining. In general, we might expect the rising cost of medical school to cause a decline in the supply of doctors. Still, show the trend in the cost of medical school. On expectation of future prices, the price of a doctor is her salary. Use data to show the trends in changes in doctor's salary over the past 10 years. This will tell you if the prices of the services that doctors provide (since the salary of the doctor represents the value of her/his skill and knowledge) is going to increase or decrease in the future. Hint, if the price is expected to rise in the future, suppliers (of any good and/or service) should increase their supply. etc..... See the text section here and again point out how they impact this situation
Ai : Profit Max/Cost of Production Analysis
What are the costs to start the enterprise/business ( or here the total cost to become a doctor and how much time it will take and projected student loan amount at education completion), the revenue (projected annual income and how long it will take to pay off loans) , is there a profit or loss or at what point she will be debt free. Basically this section will show us if starting this business will be profitable or not.
You can either use real numbers or best guess estimates to show the process analyzing anticipated costs and anticipated profits/losses. Please outline where the numbers came from.
Aii :
Identify & outline the market structure in which the firm or labor service will be sold.
B: Price Elasticity of Supply
Calculate Price Elasticity of Supply you have based on the cost of production changes (choose two years say 2013 and 2014 for example) find data about salary of doctors for that period (price) as well as number of doctors that entered the field (quantity) as output changes, including actual calculation of it using the midpoint formula. Use two different years to calculate. Discuss if supply is either price elastic or price inelastic.
The references provided in the project paper should help with these numbers./
C: Supply graph
Graph a simple supply curve- the same data for computing elasticity can be used (quantities supplied and prices for two different years).
Section 3: Recommendations:
In this section, summarize your findings in the above sections and state your recommendations based on those findings.
References:
List the full references for at least five sources alphabetically in APA format.