Question

You are the manager of a health clinic that is located in a building owned by four physician partners. The clinic owners hire all the clinic staff, including doctors, nurses, lab technicians, and office staff.

1. Based on what you have learned in the context of this course, identify and discuss the decisions that would need to be made in order to efficiently operate this clinic in both the short run and the long run.

2. Discuss and classify the clinic input costs—fixed inputs and variable inputs—in the short run. Provide specific examples of both types of inputs.

Answer 1

a. Being the manager of the clinic, I would be responsible for taking all the necessary decisions and administering the functioning of the clinic. In order to efficiently operate the clinic in the short and long run, the following decisions would need to be made-

1. Hiring of efficient staff would be very important as it would determine the efficient and successful functioning of the clinic. Efforts would be taken to conduct interviews and rounds to hire the best staff possible with the necessary skills and qualifications.

2. The staff would be well looked after in order to enable the clinic to run smoothly. All the expectations and demands of the staff members would be considered on a personal level.

3. The salary of the staff members would be decided without any bias, based solely on the qualification. Also, they would be offered promotions and bonuses as and when possible.

4. Taxes would need to be paid regularly without any delay and all the finances of the clinic would need to be kept in order to prevent any problems in the long run.

5. The patients would need to be properly attended to, with utmost care and warmth.

6. Also, the clinic would be required to be kept in good maintenance, wih all the updated technology and medical equipments.

b. The clinic input costs would be divided into fixed inputs and variable inputs. Fixed inputs are factors of production which are fixed in the short run. The capital required for the clinic is a fixed input. Also, salaries given to the staff, electricity and water bills, all the expenses related to maintenance are fixed inputs.

Variable inputs are those which change over a short period of time. Labour is a variable input.