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

question 37

Multiple Choice

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

• A) Expenditures rise to $240
• B) Expenditures rise to $270
• C) Expenditures fall by $120
• D) Expenditures remain at $120

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Definitions:

Testable

Testable describes a hypothesis or theory that can be empirically examined through experimentation or observation, allowing for verification or falsification.

Critical Period

A specific time in early development during which the organism is particularly receptive to certain stimuli, often resulting in permanent, irreversible outcomes.

Cohort

A group of people who share a common characteristic or experience within a defined period, often used in statistical and sociological research.

Personal Biases

The predispositions or inclinations people have that can sway their judgment or decisions, often unconsciously.