In markets with third-party payers,
A) prices consumers pay directly for the goods and services they consume decrease.
B) prices suppliers receive for the goods and services they provide increase.
C) total spending increases.
D) all of the above

Question

Quizplus · Accepted Answer

In markets with third-party payers, such as healthcare, consumers often pay less directly out-of-pocket because a third party (like an insurance company) covers a portion of the costs. This can lead to suppliers receiving higher payments for their services, as the presence of insurance can reduce price sensitivity, allowing for higher charges. Consequently, total spending in the market tends to increase due to less price sensitivity and higher demand facilitated by third-party payments.

In Markets with Third-Party Payers