A government agency notifies the physicians' group in Problem 30-10 that to continue providing services in the community, the group must document its activities. The resulting paperwork expenses raise the cost of each unit of health care services that the group provides. What is the likely effect on the profit-maximizing price and the equilibrium quantity of health care services provided by the physicians' group in this community?

Short Answer

Expert verified

profit-maximizing price will rise and the equilibrium quantity of health care services will decline

Step by step solution

01

Given Information

A gathering of physicians lays out joint practice in the far off region. As this is the main gathering, this whole gathering will function as an imposing business model.

02

Explanation

Restraining infrastructure is a market structure where there is a solitary maker or vendor that has control of the whole market. They are managing such help that have no nearby substitutes, however, has an immediate interest, supply, and costs of their administration.

Presently because of the expansion in paperwork, the expense of offering types of assistance by the gathering will increment. The interest bend continues as before, and the minor expense marginal cost bend moves upwards. In such a case, the profit-maximizing prices will rise and the equilibrium quantity of health care services will decline.

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