when the supplier, not the demander, decides what types and amounts of health care are to be consumed, it is called a case of su

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jarptica [38.1K]

1 year ago

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when the supplier, not the demander, decides what types and amounts of health care are to be consumed, it is called a case of su

pplier-induced

Business

1 answer:

snow_lady [41] · Answer 1 · 2024-05-03T09:30:30+03:00

According to the supplier-induced demand theory, healthcare practitioners that prioritize their own financial well-being over the interests of their patients produce induced demand.

<h3>Why is an issue with supplier-induced demand?</h3>

If asymmetric information does not exist, the provider can utilize better information to persuade a person to purchase more of the item or service they offer than the Pareto efficient level. This causes a loss to welfare.

<h3>What is the fundamental tenet of the Sid hypothesis on supplier-induced demand?</h3>

Supplier-induced demand (SID) in the context of healthcare refers to the idea wherein doctors control their patients' demand for medical services to boost the use of healthcare.

Know more about Pareto efficient here:

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