Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 fora pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-S$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18,1991: A2). Calculate the hospital's price/marginal cost ratio, its Lerner Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes itsprofit).What is Humana's price/marginal cost ratio?The price to marginal cost ratio is 12.41. (round your answer to two decimal places)What is its Lerner Index?Its Lerner Index is(round your answer to two decimal places)terAssutvMacBook AirDIIescF7F3F1F2F4F6@#3$%&147QWEYtabASDHKcaps lockVNMshiftfncontroloptioncommand

Given : Marginal Cost = $8.35 Price = $103.65

Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 for a pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18, 1991: A2). Calculate the hospital's price/marginal cost ratio, its Lemer Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes its profit). What is Humana's pricelmarginal cost ratio? The price to marginal cost ratio is 12.41. (round your answer to two decimal places) What is its Lerner Index? Its Lerner Index is (round your answer to two decimal places)

Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 for a pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18, 1991: A2). Calculate the hospital's price/marginal cost ratio, its Lemer Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes its profit). What is Humana's pricelmarginal cost ratio? The price to marginal cost ratio is 12.41. (round your answer to two decimal places) What is its Lerner Index? Its Lerner Index is (round your answer to two decimal places)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Many companies start with cost to determine price since revenue must cover cost for the firm to make a profit. True False
The graph below plots the firm's total revenue curve: that is, the relationship between quantity and total revenue given by the two right columns in the table above. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. 90 81 72 63 54 В D 45 36 27 18 A E 100 200 300 400 500 600 700 800 QUANTITY (Dishwashers per year) TOTAL REVENUE (Thousands of dollars per year)
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
Identify two fixed costs and two variable costs associated with setting up a hair dressing salon or barbershop
Suppose you own an acre of land. You could grow crops on that land. The cost of seeds is $100. The crops you grow from those seeds will sell for $350. You could also rent the land to another farmer. The rent you could eam is $300. Calculate your economic profit. (Do not include a $ sign in your answer.) Answer: Suppose the total cost function for a firm is given by: TC= 100 + 2q +0.5q2. Find the marginal cost function and then use that to determine the marginal cost of the 10th unit. (Do not include a $ sign in your response.) # Answer:
Sarge's Lawn Mowing Service is a small business a perfectly competitive market. The prevailing market price of lawn mowing is $20 per acre. Sarge's costs are given by total cost = 0.1q² + 10q + 50, where q = the number of acres Sarge chooses to cut a day. How many acres should Sarge choose to cut to maximize profit? values without any comma, or decimal places.) How much is Sarge's maximum daily profit? your answer in numerical values without any dollar sign, comma or decimal place (please put your answer in numerical (please put
Suppose the hospital has the following output, price and average cost structure. Output 0 Price 45 Average Cost ----- 1 40 40 50 2 35 28 3 30 20 20 4 25 17 5 20 20 18 6 15 20 20 7 10 21 a) What is the total cost if they produce 6 units ? b) What is the total revenue if they produce 4 units? c) What is the marginal revenue producing 5 units? d) What is the marginal costs of producing 3 units? e) What is the profit max quantity if the hospital is in a competitive market? f) What is the profit max quantity if the hospital is in a monopoly? g) What is the profit max price if the hospital is in a competitive market? i) What is the total profit in the competitive market for this hospital? j) What is the total profit in the monopoly market for this hospital?
I need this in words Not handwritten or no pic
Economics
A) Find the price function and then the TR function. B) Write the MR and MC functions below. Remember: MR = dTR/dQ and MC = dSTC/dQ. C) What positive value of Q will maximize total profit? Remember: setting MR = MC and solving for Q will give you the Q that maximizes total profit. The value of Q you get should not be zero or negative.
A demand of 230 banquet attendees can be expected at a dinner plate price of $80.00 each. A demand of 370 banquet attendees can be expected at a dinner plate price of $45.00 each. Catering Service A has a fixed cost of $1,800 and a marginal cost of $30 for each plate. Catering Service B has a fixed cost of $2,500 and a marginal cost of $22 for each plate. Costs for both caterers include the food, drinks, plates, utensils, tablecloths, glasses, crew, and cleanup. Dinner plates will only be sold as an entire unit. To justify company resources and to ensure the event will benefit the charity, the CEO insists the tickets be sold for no less than $40. All profits will go toward a charity of the committee's choosing. Additional spontaneous donation to the charity will be accepted the night of the banquet. Studies estimate that 5% will give $5, 23% will give $20, 18% will give $50, 7% will give $100, and 2% will give $500. Find the Profit function, P(x) , for each of the two possible…
A firm faces the following average revenue (demand) curve: P = 100 - 0.01Q where Q is weekly production and P is price, measured in cents per unit. The firm's cost function is given by C = 50Q + 30,000. Assuming the firm maximizes profits, the firm's level of production is price in cents is and total profit per week in dollars is (please put your answer for price, quantity and profit in numerical values without any dollar sign, comma or decimal place). If the government decides to levy a tax of 10 cents per unit on this product, the new level of production is the price received by the monopolists after tax in cents is and total profit per week in dollars is the price facing the consumer after the imposition of the tax in cents is (please put your answer for price, quantity and profit in numerical values without any dollar sign, comma or decimal place).