Assessment Description
The purpose of this assignment is to compare the different market structures within the realm of health care. Use the “Health Care Market Structures” template to identify the four basic market structures, describe their role within health economics, describe the advantages and disadvantages of each market structure, and provide a specific health-care-related example of each market structure.
Please use two or three peer-reviewed sources to assist you with this assignment.
While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to LopesWrite. A link to the LopesWrite technical support articles is located in Class Resources if you need assistance.
Essentials of Health Economics
Dewar, D. M. (2017). Essentials of health economics (2nd ed.). Burlington, MA: Jones and Bartlett Learning. ISBN-13: 9781284054620
Government and Policy for U.S. Health Leaders
Higbea, R., & Cline, G. (2021). Government and policy for U.S. health leaders (2nd ed.). Burlington, MA: Jones and Bartlett Learning. ISBN-13: 9781284207767 (Available as a custom eBook – includes only Chapter 6)
Expert Solution Preview
Introduction:
This assignment aims to compare different market structures in the healthcare industry and analyze their role in health economics. The following answer will provide a brief overview of each market structure, their advantages and disadvantages, and specific healthcare-related examples for each.
Answer:
There are four basic market structures in the healthcare industry, namely perfect competition, monopolistic competition, oligopoly, and monopoly.
Perfect competition is a market structure where there are many small firms that cannot affect the market price through their actions. In the healthcare industry, perfect competition can be seen in the market for generic drugs. The advantages of this structure are that there are low barriers to entry, leading to a competitive environment that eventually lowers prices for consumers. However, the disadvantage is that there is no product differentiation, leading to lower profits for firms.
Monopolistic competition has many firms that produce differentiated products, creating a certain level of monopoly power. This market structure can be seen in the healthcare industry in the market for cosmetic surgery. The advantages are that firms can differentiate their products, creating customer loyalty and higher profits. However, the disadvantage is that firms have some monopoly power, which allows them to charge higher prices.
Oligopoly is a market structure where there are a few large firms that control the market. In the healthcare industry, an example of this market structure is the market for health insurance. The advantages of oligopoly are that firms can benefit from economies of scale, leading to higher profits and lower costs for consumers. However, the disadvantage is that there is limited competition, leading to higher prices for consumers.
Monopoly is a market structure where there is only one firm that controls the market. In the healthcare industry, an example of this market structure is the market for vaccines. The advantages of a monopoly are that the firm can benefit from economies of scale, leading to lower costs for consumers. However, the disadvantage is that the firm has complete control of the market, leading to higher prices for consumers.
In conclusion, understanding the market structures in the healthcare industry is essential for policymakers, healthcare providers, and consumers. Each structure has its advantages and disadvantages, which can affect prices, quality of care, and access to healthcare.
