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Could you Describe the assumptions of the monopoly model? - Austin Powers - 01-16-2013 09:27 AM
Describe the assumptions of the monopoly model, as it applies to health and medical
services, where price discrimination takes place?
- vethuvettu - 01-16-2013 09:29 AM
It looks like discriminating monopoly
The first Assumption is the consumer did not know the market Ignorance of Market
Naturally In Medical and Health sevices the patient does not know the full knowledge of the market that is the fees charged by different Medical and Health services
2There is distance between the market that is the consumer did not know the diffent market conditions as there is a quite distance from them
Medical and Health sevices were given at different markets and some of them are at various places and hence the patiendt did not know about it.
Different prices are charged according to elasticity of the market
Medical sevices and health sevices charge heavily where there are no emergency services that is market is inelastic ehe thhey can charge more and in the places where the market is elatic that is where the awevices are plenty lesss chargs are made
- Sipra M - 01-16-2013 09:36 AM
Monopoly means single seller but many buyers. Discriminating monopolist -> when monopoly chargers different prices for the same product from different customer or fixes different prices for the same product in different market . For example : Doctor charges low fees from a poor patient and high fees from others. Social scheme provides medical facilities at lower cost to poor section.
* Monopoly market : assumptions ->
* single producer.
* no substitute or even it is , it is not available easily.
* No need to take promotional activities to compete.
* Downward sloped demand curve. Monopolist can adjust either price or quantity produce to maximize gain..
* to sale more it has to reduce price.
* Profit max : MR = MC
and so on ;
for more see microeconomics of intermediate standard.
*