Would you expect there to be more or less of a tendency towards supplier induced
ID: 1208090 • Letter: W
Question
Would you expect there to be more or less of a tendency towards supplier induced demand if doctors are paid a flat salary rather than fee for service? Explain. "Licensure restricts entry into medical professions for such health care providers as doctors, pharmacists, and dentists. This can only benefit these professions and will always harm patients by making doctors, dentists, and so on, more expensive." Discuss. What are barriers to entry? Describe three potential barriers in the pharmaceutical industry. What are some consequences of these barriers?Explanation / Answer
a) Human alaways trade off between wages and leisure. If doctors get salary instead of wages then there is a chance that they will want to enjoy more leisure than now because they will not get any extra benifit due to taking extra care of paitents. So supply of their work will be less.
b) This is true from one perspective that all are not equally skilled so if someone impose license to entry then some not enough skilled person will get advantage of restriction and paitent will always harm. On the other hand if license are imposed based on some certain ability then paitents will get benifit because they will aware of the potential of those doctors. But the free market where all doctors get equal chance are benificial because same like market law the people who cannot supply efficient services will leave the market and able will exist in the market besides that paitent will not be charged extra for license.
c) Medical degree , Set up cost for hospitals, Government price celling for some medicine and treatment.
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