COURSE:
ECON312N: Principles of Economics
Initial Post Instructions
Consider the following statement:
Firms in the healthcare industry do not seem to have features of a perfectly competitive market structure and, therefore, must not be classified as such. Those firms fall somewhere within the continuum from monopolistically competitive and oligopoly markets to monopoly markets (specifically regional monopolies).
For the initial post, decide if you agree or disagree with the statement.
- If you agree with this statement, provide at least two examples of firms in the healthcare industry (pharmaceutical companies, medical centers, insurance companies, etc.), and identify the features the firms you selected have that make you believe that they should be classified in one or several of the following market structures: monopolistically competitive and oligopoly market structures; monopoly market structures.
- If you disagree with the statement, name at least two firms in the healthcare industry (pharmaceutical companies, medical centers, insurance companies etc.), and provide reasons why those firms you selected can be classified as perfectly competitive firms.
Note: The two examples must come from different industry groups. For example, both firms cannot be insurance companies.
SOLUTION
Professor and class,
I agree with this statement that the healthcare industry operates somewhere in the continuum from monopolistic competition and oligopoly markets to monopoly markets. This statement is easily proved by looking at the pharmaceutical demand supplied solely from CVS and Walgreens. According to the Lown Institute, “Together they control 60% of the pharmacy and drug store market” (2019). In addition, “CVS controls 30% of the pharmacy benefit management market” (2019)………..please follow the link below to purchase the solution at $5
