Question

A number of professional associations, such as the American Medical Association and the American Bar Association, support regulations that make it more costly for their members (for example, doctors and lawyers) to practice their services. While some of these regulations may stem from a genuine desire for higher-quality medical and legal services, self-interest may also play a role. Explain.

Short answer

The cost to be able to practice these professions and be part of the association will be higher

Step-by-step solution

To define health and law professions

Many associations, such as the American Medical Association and the American Bar Association, favor applying regulations that make it more expensive for health and law professionals to practice their professions to increase the quality of services. Likewise, these professionals require a high-level technical and educational preparation, which warrants higher entry costs for these professions.

To find the price strategy

The prevailing measure may represent a price strategy to avoid the entry of new competitors. In the case of new doctors and lawyers, the cost of being able to practice these professions and be part of the association will be higher. This barrier to entry for new professionals will benefit graduate or incumbent doctors and lawyers with years of experience who already belong to their affiliated associations. These experienced professionals face less competition as their current income maintains and increases over time.

To find the profession

In addition to seeking a genuine desire for higher-quality medical and legal services, an element of self-interest to prevent the entry of possible new professionals is involved in this case. The newcomers may reduce the earnings of existing professionals who practice their profession and already belong to an association.