Refer to the Graph Shown That Depicts a Third-Party Payer

question 39

Multiple Choice

Refer to the graph shown that depicts a third-party payer market for prescription drugs. What happens to expenditures by consumers in this market if a $2 co-pay is established compared to a free-market equilibrium?

• A) Expenditures fall by $30
• B) Expenditures rise by $90
• C) Expenditures fall by $120
• D) Expenditures remain at $150

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Definitions:

Insufficient Return

A return on an investment or project that is not high enough to cover the costs or meet the expectations of the stakeholders.

Cap-And-Trade

Cap-and-trade is an environmental policy tool designed to reduce pollution by setting a limit (cap) on emissions and allowing businesses to buy, sell, or trade permits for emissions under this cap.

Emission Allowances

Emission allowances are permits or credits that allow the holder to emit a certain amount of pollutants over a set period.

Aggregate Emissions

The total amount of emissions (such as CO2, methane) released into the atmosphere by a specific entity, region, or activity, contributing to environmental impacts like climate change.