• Use a graph to illustrate how the following changes could affect the demand curve for inpatient services at a hospital in a large city.

A number of physicians in the area join together and open a discount-price walk-in clinic; the cross-price elasticity of demand between physician services and inpatient hospital services is: -0.50

Hints

1.Are the walk-in clinic and the inpatient hospital services complements or substitutes? Why?

2.What does the cross-price elasticity number tell you that it is?

3.Use this knowledge to show the shift in the demand curve for inpatient services in a hospital in a large city