Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will
A) place downward pressure on the prices of healthcare services.
B) lead to higher healthcare prices.
C) increase the incentive of consumers to economize on their purchases of healthcare services.
D) increase the incentive of healthcare providers to provide their services at economical prices.

Question

Quizplus · Accepted Answer

Subsidies and third-party payments reduce the direct cost to consumers, increasing demand and allowing providers to raise prices.

Economic Theory Indicates That the Growth of Subsidies to Healthcare