Question

Emergency room health care tends to have a demand curve that is very steeply sloped, while elective surgery does not. Why? Also, health care insurance and vacation spending tend to have a negative cross price elasticity of demand for many people. Why?

Answer 1

Emergency room health care demand is expensive because it tends to be more of a necessity in its time of use. On the other hand, elective surgery is the contrast because compared to ER; it is less of a necessity. People have more money to spend on vacations when healthcare insurance prices go down.