- Utilize The Following Graph Of The Medical Doctor Services Market In Which There Is A Third Party Present Insurance Co 1 (69.62 KiB) Viewed 18 times
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 supply 2 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.