Because of the persistent moral hazard problem, the demand curve tends to _________________ as health insurance...

Because of the persistent moral hazard problem, the demand curve tends to _________________ as health insurance companies face increasing financial risks associated with the costly but unforeseen healthcare overutilization of their insureds.

Group of answer choices

- none of the choices listed here

- slope down

- slope up

- slope up and down

- slope flatly

Solutions

Expert Solution

Answer-

The correct option is Slope down.

Because of the persistent moral hazard problem, the demand curve tends to Slope down.

As the consumer is often not paying the full price for that treatment because the cost is frequently covered, at least some part or most by an insurance company.

It means that the traditional approach to demand does not work very well for health-care services as health insurance companies face increasing financial risks associated with the costly but unforeseen healthcare overutilization of their insurers.

The other Options slope up, slope up and down and slope flatty are incorrect.

jeff jeffy answered 2 years ago

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