When Consumers Pay Only a Fraction of the True Cost

question 113

Multiple Choice

When consumers pay only a fraction of the true cost of medical services, their demand increases.The marginal cost of producing these extra services

• A)is greater than the marginal benefit consumers receive from them.
• B)is less than the marginal benefit consumers receive from them.
• C)is equal to the marginal benefit consumers receive from them.
• D)is zero due to the insurance payments.

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Definitions:

Nuclear Warheads

Explosive weapons that derive their destructive force from nuclear reactions and can cause massive destruction and loss of life when detonated.

Corporation

A legal entity recognized by law, distinct from its owners, with rights to own assets, incur liabilities, and conduct business.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business.

Dealer Markets

Financial markets where dealers buy and sell securities for their own accounts, acting as principals in the transactions.