Question

Scenario: Consumers want more information; they want to choose the best provider and the resulting competition will help to squeeze out costly waste and ineffective care. After all, markets work pretty well for other goods and services. The notion has some appeal, and a dose of market medicine would help some of what ails the nation's health-care system. But as a cure, the approach rests on the belief that healthcare is - in most respects - like any other product.

1. What are the essential characteristics that are required for a market to exist?

2. How can the medical marketplace be made more efficient?

Answer 1

1) it can be mentioned that the consumers want more information so that the competition levels are reduced and ultimately it can be inferred that the competition level that they are actually seeking is a perfectly competitive market on the whole and in this regard you have to understand the fact that the characteristics of perfectly competitive market includes large number of sellers and buyers in the market and effect information. Apart from that, the prices always constant for the medicines and it is the highest form of efficiency exists in any market

2) in order to increase the efficiency or to make the medical market place more efficient, it is important for the government to reduce the restrictions sach as patent laws etc. so that it would be helpful for many of the firms to engage in this business as a result of which the price can come down and information can spread on the whole