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In: Economics

Explain the concept of “diseconomies of scale” and discuss how a physician-firm might encounter this issue.

Explain the concept of “diseconomies of scale” and discuss how a physician-firm might encounter this issue. Then, consider two ways in which the physician-firm might pay its physicians: fee-for-service or salary. Discuss which of these payment schemes might be best for limiting diseconomies and any negative impacts such a payment scheme might have for patients. 

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