Pen Point 36

Given adequate information, the market theory assumes that consumers know what is best for themselves; hence, they make choices that maximize their total satisfaction. If this assumption is wrong, markets may not efficiently produce. We call this satisfaction consumers gain from consuming a good or service as “utility”. The satisfaction (or utility) depends on the quantity and mix of goods and services chosen by a consumer. The theory holds that consumers get more satisfaction from more goods and services but the increase in satisfaction from consuming additional units gradually diminishes. In health care, how do consumers go about choosing the mix of goods and services which give them the maximum total utility? In places where there are few sources of health care goods and services, do people take into account their tastes/preferences and income when choosing a combination of goods and services which gives the people the highest utility? Do people’s preferences and tastes change in situations where there are very few choices? Or do they develop an acquired taste/preference because of limitations posed by societal inequities?

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