Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will
A) lead to higher healthcare prices.
B) lead to lower healthcare prices.
C) reduce the incentive of consumers to economize.
D) increase the incentive of healthcare providers to provide their services at a low cost.
E) do both a and c above.

Question

Quizplus · Accepted Answer

Subsidies and third-party payments often lead to higher healthcare prices as they reduce the direct cost burden on consumers, decreasing their incentive to economize.

Economic Theory Indicates That the Growth of Subsidies to Healthcare