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Suppose we allocate a budget for flu shots between physicians and licensed physician assistants. Let MBP equal the marginal benefit from physician administering flu shot and MCP equal the marginal cost of physician administering flu shot. Let MBA equal the marginal benefit from physician assistant administering flu shot and MCA equal the marginal cost of physician assistant administering flu shot. Currently, the MBP/MCP < MBA/MCA. We can correctly conclude that

too many flu shots are being given by physician assistants.

too many flu shots are being given by physicians.

too many flu shots are being given by physician assistants relative to physicians.

too many flu shots are being given by physicians relative to physician assistants.

an optimal allocation cannot be found.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91720543

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