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Concepts Of Cost And Prices Under Different Market Structures
Concepts of cost
In a perfectly competitive market structure, the buyers are free to sell to any person. There are no monopolies that mean firms are free to enter or exit the markets. a large number of firms are producing and selling products that indicate they enjoy small suppliers power. There is a large number of buyers so they cannot influence the market price.
The profit-maximizing level of the output is determined by balancing marginal revenue and marginal costs. The perfectly competitive firms also equate marginal revenue and marginal costs for profit maximization.
As a CFO the cost-cutting measures that I would propose for addressing the excessive costs of operating include lowering financial expenses. Consolidating health insurance policies is an effective method for minimizing costs. Efficient time strategies can also be adopted that will minimize waste of time CITATION Ire13 \l 1033 (Papanicolas, Woskie, & Jha, 2013). Reducing salaries of the doctors and administration staff can be another measure for managing costs.
Health spending in the United States is large than in other high-income countries. This is the high salaries paid to the doctors, nurses and the administration staff compared to the other countries. The prices of medicines and goods also contribute to high healthcare spending in America. In US spending is 108 per cent higher compared to Canada. The central reason is that the US pays for health services. Programs like Medicaid and Medicare have also contributed to high spending. The high reimbursements demanded by specialists also leads to high costs. The specialists demand high fees that directly impacts the overall healthcare spending CITATION Yon181 \l 1033 (Blumberg, 2018). Drug costs used for different diseases are significantly high in America compared to other high-income countries. Administrative costs including facilities and insurance are also high.
References
BIBLIOGRAPHY Blumberg, Y. (2018). Here's the real reason health care costs so much more in the US. Retrieved 05 26, 2019, from https://www.cnbc.com/2018/03/22/the-real-reason-medical-care-costs-so-much-more-in-the-us.html
Papanicolas, I., Woskie, L. R., & Jha, A. K. (2013). Health Care Spending in the United States and Other High-Income Countries. JAMA , 39 (1), 1024-1039.
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