Question 1

From a structural perspective, what are the three market segments facing nursing home markets?

Accepted Answer

One segment reflects the private-pay market for residents paying more than the state-set Medicaid rate. This segment faces a downward-sloping demand curve. The second segment is the Medicaid eligible people in the market, and because Medicaid pays a single rate, the demand curve is horizontal. The remaining segment is private-pay residents who pay less than the Medicaid rate. As long as the nursing home has excess capacity and the price received from this last group covers fixed costs and some variable costs, nursing homes will sell services to this downward-sloping demand.

Question 2

If demand is price elastic, then an increase in price will cause

Accepted Answer

A)  Total revenue to increase 
B)  Total revenue to stay the same 
C)  Total revenue to decrease 
D)  Impact is indeterminate 
A)  Total revenue to increase 
B)  Total revenue to stay the same 
C)  Total revenue to decrease 
D)  Impact is indeterminate C

Question 3

What is the Herfindahl index (HI) in a market of three practices providing 10,000 visits, where one physician provides 5,000 visits, the second physician provides 3,000 visits, and the third physician provides 2,000 visits.

Accepted Answer

3,800 ((50)² + (30² + (20²)

Question 4

What is an oligopolistic market and what are the results of such a market?

Accepted Answer

In an oligopoly market, a few firms tend

Question 5

The demand for long-term care reflects a derived demand rather than a basic demand.

Accepted Answer

A) True 
 B)False

Question 6

In a monopolists market, the more elastic the demand, the steeper the slope of the demand curve.

Accepted Answer

A) True 
 B)False

Question 7

The profit-maximizing monopolist will set price and quantity such that its MR = MC.

Accepted Answer

A) True 
 B)False

Question 8

In a monopolistic market, demanders have close substitutes for the good or service.

Accepted Answer

A) True 
 B)False

Question 9

In a monopsonist market, the marginal cost of an additional unit of a good or services

Accepted Answer

A)  Is lower than its price 
B)  Is higher than its price 
C)  Is the same as its price 
A)  Is lower than its price 
B)  Is higher than its price 
C)  Is the same as its price

Question 10

The acceptance by physicians of Medicare assignment relieves patients from the financial risks associated with higher physician fees.

Accepted Answer

A) True 
 B)False

Question 11

Charging different prices for the same product to different buyers is called price discrimination.

Accepted Answer

A) True 
 B)False

Question 12

In a monopoly market, MR is positive only at those quantities that correspond to

Accepted Answer

A)  The inelastic portion of the demand curve 
B)  The unit elastic portion of the demand curve 
C)  The elastic portion of the demand curve 
D)  None of the above 
A)  The inelastic portion of the demand curve 
B)  The unit elastic portion of the demand curve 
C)  The elastic portion of the demand curve 
D)  None of the above

Question 13

In a monopolistic competition model, the fundamental conditions include:

Accepted Answer

A)  There are few competitors and potential competitors in the market 
B)  Each firm can vary its product quality 
C)  There is no ability to develop consumer loyalty 
D)  All of the above 
A)  There are few competitors and potential competitors in the market 
B)  Each firm can vary its product quality 
C)  There is no ability to develop consumer loyalty 
D)  All of the above

Question 14

Market power can only be wielded by sellers in the market.

Accepted Answer

A) True 
 B)False

Question 15

Essential ingredients of market power are:

Accepted Answer

A)  Ease with which buyers and sellers can weigh alternatives 
B)  Substantial availability of viable substitutes 
C)  Inability to influence terms of exchange 
D)  All of the above 
A)  Ease with which buyers and sellers can weigh alternatives 
B)  Substantial availability of viable substitutes 
C)  Inability to influence terms of exchange 
D)  All of the above

From a structural perspective, what are the three market segments facing nursing home markets?

If demand is price elastic, then an increase in price will cause

What is the Herfindahl index (HI) in a market of three practices providing 10,000 visits, where one physician provides 5,000 visits, the second physician provides 3,000 visits, and the third physician provides 2,000 visits.

What is an oligopolistic market and what are the results of such a market?

The demand for long-term care reflects a derived demand rather than a basic demand.

In a monopolists market, the more elastic the demand, the steeper the slope of the demand curve.

The profit-maximizing monopolist will set price and quantity such that its MR = MC.

In a monopolistic market, demanders have close substitutes for the good or service.

In a monopsonist market, the marginal cost of an additional unit of a good or services

The acceptance by physicians of Medicare assignment relieves patients from the financial risks associated with higher physician fees.

Charging different prices for the same product to different buyers is called price discrimination.

In a monopoly market, MR is positive only at those quantities that correspond to

In a monopolistic competition model, the fundamental conditions include:

Market power can only be wielded by sellers in the market.

Essential ingredients of market power are:

Overview of Economics

Output of the Healthcare Sector

Economic Dimensions of the Healthcare System

Demand for Health and Medical Care

Healthcare Production and Costs

Behavior of Supply

Provider Payment

Competitive Markets

Health Insurance

The Labor Market

Economic Evaluation of Health Services

Value Judgements and Economic Evaluation

Finance Health Care

Public Health Insurance

Regulation and Antitrust Policy in Health Care

Reform of the Healthcare Market

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Exam 9: Market Power in Health Care

From a structural perspective, what are the three market segments facing nursing home markets?

If demand is price elastic, then an increase in price will cause

What is the Herfindahl index (HI) in a market of three practices providing 10,000 visits, where one physician provides 5,000 visits, the second physician provides 3,000 visits, and the third physician provides 2,000 visits.

What is an oligopolistic market and what are the results of such a market?

The demand for long-term care reflects a derived demand rather than a basic demand.

In a monopolists market, the more elastic the demand, the steeper the slope of the demand curve.

The profit-maximizing monopolist will set price and quantity such that its MR = MC.

In a monopolistic market, demanders have close substitutes for the good or service.

In a monopsonist market, the marginal cost of an additional unit of a good or services

The acceptance by physicians of Medicare assignment relieves patients from the financial risks associated with higher physician fees.

Charging different prices for the same product to different buyers is called price discrimination.

In a monopoly market, MR is positive only at those quantities that correspond to

In a monopolistic competition model, the fundamental conditions include:

Market power can only be wielded by sellers in the market.

Essential ingredients of market power are:

Overview of Economics

Output of the Healthcare Sector

Economic Dimensions of the Healthcare System

Demand for Health and Medical Care

Healthcare Production and Costs

Behavior of Supply

Provider Payment

Competitive Markets

Health Insurance

The Labor Market

Economic Evaluation of Health Services

Value Judgements and Economic Evaluation

Finance Health Care

Public Health Insurance

Regulation and Antitrust Policy in Health Care

Reform of the Healthcare Market

Filters