Figure 7-2

Figure 7-2 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services.
-Refer to Figure 7-2.With insurance and a third-party payer system, what is the amount of the deadweight loss?

Question

Figure 7-2
  
Figure 7-2 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services.
-Refer to Figure 7-2.With insurance and a third-party payer system, what is the amount of the deadweight loss?

Quizplus · Accepted Answer

The deadweight loss in a third-party payer system is the loss of economic efficiency when the quantity of a good or service is not optimal. In this scenario, the deadweight loss is calculated as the area of the triangle formed by the difference between the quantity demanded and the quantity supplied at the price paid by the third-party payer. The amount of $3,000 represents this inefficiency in the market.

Figure 7-2 Figure 7-2 Represents the Market for Medical Services with and for Medical