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Is there a reason other than charity that would explain why physicians might use a "sliding scale" in charging poor patients a lower price than they charge wealthier patients? Explain

Economics Dec 15, 2020

Is there a reason other than charity that would explain why physicians might use a "sliding scale" in charging poor patients a lower price than they charge wealthier patients? Explain.

Expert Solution

The idea of thinking at the margin applied to this situation means that a physician will accept more patients as long as the marginal cost of doing so is less than or equal to the marginal revenue. That is, there will be a number of patients who will pay the full fee, which will cover the practice's fixed costs of rent, utilities, equipment, and so forth. If there is extra time in the doctor's schedule, and all the fixed costs are paid, then the doctor can accept more patients as long as the marginal costs of time and salaries and supplies are covered.

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