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?

Question

anonymous · Answer

Emergencies are inelastic. If a close relative of yours is dying (god forbid), for example, will you hesitate to pay the price to save said relative? I highly doubt it. So increases in emergency medical costs are almost irrelevant until they reach a certain point. 

Elective surgeries, like plastic surgery is very elastic. Lets say some girl wants a nose job just cause shes self conscious, and had set aside $5,000 for said surgery. Then the shutdown hits and now surgery cost has increase. Depending on how shallow this woman is, the logical human being would say, "screw that I'm happy with who I am"

anonymous · Answer

I forget how cross price elasticities work, but it must be the same scenario. Think about vital needs vs luxuries. Health care insurance is almost a must for most people, while vacation spending is elastic and not very necessary for people.