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Question
Favorable tax policies have encouraged the construction of new hospitals in the United States. How does this affect the equilibrium price and quantity for medical services?
a. They are not affected.
b. They have risen because supply and demand have decreased.
c. They have fallen because demand has decreased and supply has remained constant.
d. Equilibrium price has fallen and quantity has risen as supply has increased, but demand has remained constant.
e. Equilibrium price has fallen and quantity has risen because demand has decreased and supply has remained constant.
Answer
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