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The equilibrium price is lower, so is the equilibrium quantity exchanged.
(b) The second approach to the problem it has to do with the government's consideration for subsidizing medical care by providing a subsidy to all consumers in the country. Assuming the subsidy can only be used to pay for medical care expenses, we can explain the effect of price and quantity demanded and supplied by using the following diagram...
        
        
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Assuming the subsidy can only be used to pay for medical care expenses, we can explain the effect of price and quantity demanded and supplied by using the following diagram. Indicate the pre-subsidy price to consumers as PC0, the pre-subsidy price paid to suppliers as PS0 , the pre-subsidy quantity demanded as QC0 ,and the pre-subsidy quantity supplied as QS0...
        
        
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