Homework Help is Here – Start Your Trial Now!
Business
Economics
Utilize the following graph of the medical doctor services market, in which there is a third-party present (insurance company), to answer the following question: 180 100 20 40 72 All of the available answers are correct. D Q Question: Suppose that co-payments are set at $20 per doctor visit and quantity demanded is 72 from patients. In order for doctors to supply 72 doctor visits the price has to be $180. In a regular market (no third-party) the equilibrium price is $100 and the quantity is 40. Why is there a difference between a regular market and a third-party payer market in regards to total costs? What is the difference? In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market The difference in this case is $12.960. In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have a greater quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $8.960. In third-party payer markets, consumers pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs decrease under a third-party payer market compared to a regular market. The difference in this case is $4,000

Utilize the following graph of the medical doctor services market, in which there is a third-party present (insurance company), to answer the following question: 180 100 20 40 72 All of the available answers are correct. D Q Question: Suppose that co-payments are set at $20 per doctor visit and quantity demanded is 72 from patients. In order for doctors to supply 72 doctor visits the price has to be $180. In a regular market (no third-party) the equilibrium price is $100 and the quantity is 40. Why is there a difference between a regular market and a third-party payer market in regards to total costs? What is the difference? In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market The difference in this case is $12.960. In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have a greater quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $8.960. In third-party payer markets, consumers pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs decrease under a third-party payer market compared to a regular market. The difference in this case is $4,000

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
Utilize the following graph of the medical doctor services market, in which there is a third-party present (insurance company), to answer the following question: P 180 100 20 40 ● 72 Question: Suppose that co-payments are set at $20 per doctor visit and quantity demanded is 72 from patients. In order for doctors to supply 72 doctor visits the price has to be $180. In a regular market (no third-party) the equilibrium price is $100 and the quantity is 40. Why is there a difference between a regular market and a third-party payer market in regards to total costs? What is the difference? All of the available answers are correct. D In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $12,960. In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have a greater quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $8,960. In third-party payer markets, consumers pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs decrease under a third-party payer market compared to a regular market. The difference in this case is $4,000.
Transcribed Image Text:Utilize the following graph of the medical doctor services market, in which there is a third-party present (insurance company), to answer the following question: P 180 100 20 40 ● 72 Question: Suppose that co-payments are set at $20 per doctor visit and quantity demanded is 72 from patients. In order for doctors to supply 72 doctor visits the price has to be $180. In a regular market (no third-party) the equilibrium price is $100 and the quantity is 40. Why is there a difference between a regular market and a third-party payer market in regards to total costs? What is the difference? All of the available answers are correct. D In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $12,960. In third-party payer markets, consumers do not have to pay the full costs of their consumption. This induces people to have a greater quantity demanded than otherwise would be the case in a regular market. Therefore total costs increase under a third-party payer market compared to a regular market. The difference in this case is $8,960. In third-party payer markets, consumers pay the full costs of their consumption. This induces people to have lower quantity demanded than otherwise would be the case in a regular market. Therefore total costs decrease under a third-party payer market compared to a regular market. The difference in this case is $4,000.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Equilibrium Point
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS