Law of supply in the context of public health service
The law of supply is a crucial concept in economics that dictates that, all else being equal, the quantity of a good or service supplied by producers increases as the price of that good or service rises, and conversely, the quantity supplied decreases as the price falls. This principle holds significance within the domain of public health services, shedding light on the dynamics that shape the availability and provision of essential health interventions.
⇒ Health Economics Notes for BPH Students
In the context of public health economics, the law of supply finds its application in the provisioning of public health services and resources. As the price or cost associated with providing these services increases, the incentives for healthcare providers and institutions to supply them also rise. This underscores the need to ensure appropriate funding and resources for the effective delivery of public health interventions.
For instance, let’s explore the supply of medical equipment during a health crisis. When the price for producing critical medical supplies surges, manufacturers are encouraged to ramp up production to capitalize on the increased profitability. This reaction aligns with the law of supply as a higher price motivates greater production, potentially mitigating shortages and ensuring a more adequate supply of vital resources.
Below is a table illustrating the law of supply in the context of public health services, accompanied by explanations for each scenario:
| Price of Providing Public Health Service | Quantity Supplied | Explanation |
|---|---|---|
| Low | Low | When the price of providing the public health service is low, healthcare providers might find it less economically viable to allocate resources for its delivery. Consequently, the quantity supplied remains limited, following the law of supply. |
| Moderate | Moderate | As the price for delivering the public health service becomes moderate and justifies the resources required, the quantity supplied maintains a balanced equilibrium. Providers are motivated to meet the demand without straining their resources or profitability. |
| High | High | When the price associated with providing the public health service is high, healthcare providers are incentivized to allocate more resources and efforts to meet the demand. This results in a higher quantity supplied, aligning with the law of supply as higher prices drive increased provisioning. |
The concept of law of supply in public health service is explained with the help of table and diagram as follows:
| Price of Public Health Service | Quantity Supplied |
| 5 | 5 |
| 10 | 10 |
| 15 | 15 |
The law of supply stipulates that as the price of a good or service rises, the quantity supplied also increases, and vice versa. In the context of public health services, this principle can be applied to the resources and efforts dedicated to delivering health interventions.
Low Price, Low Quantity Supplied: When the price associated with providing a public health service is low, healthcare providers might find it less enticing to allocate significant resources. Consequently, the quantity supplied remains limited, aligning with the law of supply.
Moderate Price, Moderate Quantity Supplied: As the price of delivering a public health service becomes moderate and justifiable, healthcare providers find a balance between resource allocation and profitability. This equilibrium leads to a moderate quantity supplied, demonstrating adherence to the law of supply.
High Price, High Quantity Supplied: When the price linked to providing a public health service rises, healthcare providers respond by directing more resources to meet the elevated demand. This proactive stance results in a higher quantity supplied, in accordance with the law of supply’s assertion that higher prices stimulate greater provisioning.
In conclusion, the law of supply plays a pivotal role in shaping the availability and provisioning of public health services. As prices rise or fall, healthcare providers and institutions adjust their resource allocation and efforts accordingly, impacting the quantity of services supplied and ultimately influencing the dynamics of public health interventions.
Suggested Readings
- Definitions of Demand of Public Health Service (core actions and interventions) as compared to definitions of demand of medical care
- Determinants of demand of public health service
- Law of Demand in the Context of Public Health Economics
- Elasticity of Demand in Public Health Economics
- Strategies for creating people’s demand for public health services and goods
- Definitions of supply of public health service as compared to definitions of supply of medical care
- Determinants of Supply of Public Health Service
- Law of supply in the context of Public Health Service
- Elasticity of Supply in the Context of Public Health Service
- Strategies for increasing public sector supply and creating NGO sector supply of public health services and goods
- Supply induced demand in contrast to demand driven supply of public health services and goods
- Public Health Service and Goods Demand and Supply Market System
- Role of Government and NGOs in Promoting Public Health Marketing
- Equilibrium in Public Health Demand and Supply Market