Free Market Equilibrium in Health Care

Steps:

• Identify that removing government intervention allows supply and demand to interact freely in the health care market.
• Recognize health care as a private good with market characteristics, subject to competitive forces.
• Apply economic principle: without barriers, prices adjust until quantity supplied equals quantity demanded.
• Conclude the market achieves balance at the intersection of supply and demand curves.

Why D is correct:

• In a free market, equilibrium occurs where supply equals demand, as defined by basic economic theory, leading to stable prices and quantities.

Why the others are wrong:

• A: Health care is not a pure public good (it's rivalrous and excludable), so market provision doesn't inherently reduce it.
• B: Not all consumers benefit equally; lower-income individuals may face access barriers due to affordability.
• C: Market failures like information asymmetry and externalities persist without regulation.

Final answer: D