HCMI 3243 Chapter Notes - Chapter 8: Market Structure, Allocative Efficiency, Market Price
30 Apr 2020
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Chapter 8: structure, conduct, performance, and market analysis. Structure, conduct and performance paradigm: the io triad predicts, the structure of an industry. If markets do not produce desired levels of performance: public policies should be aimed at correcting this failure of the market, market power, firms ability to restrict output or quality and thereby raise price. Is a perfectly competitive market relevant to medical care: features of health care industries not abiding assumptions of a perfectly competitive market structure, not for profit medical enterprises, physician licensure. If demand represents full marginal social benefit: mpb = msb, and supply represents full marginal social cost, mpc = msc. If others, in addition to market participants, are affected either beneficially or adversely by a market exchange. Comparative static analysis: changes in market conditions. Input prices and technology: greater buyer income, higher price and quantity, cost saving technology, decline in price, increase in quantity.
