Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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(0) Suppose a hospital has 500 beds. It faces a demand curve x= 1200-2p, where p is the price of a bed day and x is the number of patient days of care demand. The fixed cost of adding a new bed is $150 and the total housekeeping cost is given by C=(B/3.5)^2, where B is the total number of beds. a. Suppose the hospital's market price is fixed at $250/bed day. What is the net marginal revenue to this hospital from an increase of one additional bed? How do I solve this using no calc? Just algebra.
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