What market failure does the regulation of nursing home quality address? a) High long-term care costs b) Existence of a public good c) Asymmetric information d) All of the abovef

Marketing Dec 26, 2020

What market failure does the regulation of nursing home quality address?

a) High long-term care costs

b) Existence of a public good

c) Asymmetric information

d) All of the abovef

Expert Solution

a)The correct answer is high long term care cost.

Due to the poor quality regulation of a nursing home there is a market failure in the economy which results to high long term care cost for the patients as well as for nursing home also. For the irregularities the market fails to reach efficiency, because without considering the positive and negative externalities it will allocate its resources which will burden both the patients and nursing with increasing cost.

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