How is price competition different in the health care market as compared to other more typical markets?
How is the nature of demand for medical care different than the demand for more typical products?
Name two examples of how the health care market violates the assumptions of the first welfare theorem.
Recall that the first welfare theorem lays out the assumptions under which the equilibrium in a market is efficient. Suppose that the first welfare theorem holds in the health care market. Use the concept of the second welfare theorem to explain whether or not the first welfare theorem holding rules out the need for any government intervention in the health care market.