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Instructions: Respond to two of your classmates. Engage in discourse on what strategies or policies can be leveraged in approaching the questions/scenarios your peers pose. Be sure to include information you learned from the resources provided.
This week your discussion will center on Market Power. Market power is generally defined as the ability of a firm to set prices above what a perfectly competitive market would allow. A firm with a service or product that is relatively price inelastic, has market power — the ability to raise prices without fear of losing sales.
To Prepare
Read Chapter 15 in your textbook. This chapter discusses why healthcare firms generally have market power that allows them to set prices giving them higher markups (over marginal costs).
Also, read this article from the Commonwealth Fund’s website from September 2017: Insurer Market Power Lowers Prices in Numerous Concentrated Provider Markets
Read Chapter 18 to review options managers have to limit poor decision making.
Textbook
Lee, Robert H. (2015). Economics for Healthcare Managers, Hardbound; 3rd edition.
I will attach 2 student questions to respond to. I also will attach the way packback should be written out.
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