Elasticity of Nursing or Medicare
Elasticity is the measure of how much the demand is affected by the change of price. In cheerios case, the elasticity of cheerios is high since cheerios is a breakfast cereal that can be substituted by many other cereals in the market. In this regard, the demand of this particular product is highly influenced by the product’s change of price or the change of the price of substitutable products. However, the situation is different in nursing or in Medicare services. Medical care is a need that cannot be avoided since it does not have equivalent substitutes.
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The patient options are taking the medical services at the provided cost, or consider home remedy that are not very effective, especially if the condition can only be handle by a specialist. One may also consider taking home nurse or using over the counter services in a pharmacist. However, the effectiveness of all these alternatives is not guaranteed. Moreover, medical condition can keep on changing based on specific condition. In this regard, it is a matter of life and death.
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Therefore, the nature of Medicare or nursing service gives the service an advantage of changing their prices without much effect on demand. Different arguments can be made based on different conditions. For instance, the only major alternative for hospital admission is home care nursing which will also involve the need for a qualified nurse. This may be considered as a cheaper substitute based on the fact that some expenses are eliminated however, it is an alternative that is still based on the medical care line. Therefore, nursing or Medicare services can be considered to be highly inelastic since they are not substitutable (RIngel et al., 2005).
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