The theory of cost shifting is often used as the basis forpublic policy proposals. Some believe that the increase in increasepremiums is due to cost shifting. This will be the topic of thisweek’s paper. Briefly discuss what cost-shifting is. Discuss the 4points associated with determining the profit-maximizing price. Whydo private purchasers claim that they are being charged more tomake up for lower prices paid by the government? What are some ofthe conditions under which cost shifting can occur? Based on yourresearch, do you feel that cost-shifting is occurring?
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