An increase in the price of medical care, while the effect of supply and demand are held constant, will cause an increase in the supply curve of medical care. This is because when the price increases, doctors become more willing to provide services as they can make a larger profit from providing those services. The additional income earned by providers allows them to hire more staff and purchase new equipment which further increases their ability to provide quality health care. Thus, with an increase in price comes an increased quantity supplied at that higher price point.
An increase in the availability of resources used for medical care such as technology or personnel has a twofold effect on the supply curve. First, it allows for greater efficiency due to improved productivity levels amongst workers involved in providing medical care and results in lower costs which then encourages more people to enter into this field as there are now better returns associated with it. Secondly, with increasing availability of resources results in greater access or availability of healthcare services which then leads to an upward shift along the supply curve since suppliers will be able to provide a greater number of services at that particular price level than before.
Finally, an increase in consumer demand for healthcare can result in either a downward shift or no change along the supply curve depending on how much additional cost is incurred by suppliers due to increased demand relative to any potential benefit received through economies of scale associated with larger output volumes (i.e., reduced average unit cost). In order words if there are economies of scale present within this industry then given higher levels consumer demand suppliers will have incentives produce more quantity at each respective prices thus resulting no movement along its own axis but instead shifting outwards thus causing a rightward shift along both axes; whereas if these same providers experience diseconomies related cost pressures due increased demand without any corresponding benefits from producing larger quantities then we’d observe only downwards shifts upon its own axis – thereby resulting no change long its horizontal dimension but instead just moving down vertically indicating decreased supplied amounts at each respective prices points
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