Economics classes typically focus on the simplest type of market, “perfect competition,” because that is the simplest analysis to teach and perhaps because it is the easiest to understand. But no markets are really perfect and the healthcare industry is no different. All markets stray from perfection to various degrees and a better description of most real-world markets is a more complex model called monopolistic competition. (Pettinger, 2018) The main difference is that in this model, competitors differentiate their products so that they aren’t selling perfect substitutes with numerous other competitors. That allows each firm to raise prices above their marginal costs, and it also encourages excessive investment in fixed costs which raises overall costs and results in inefficient scale (excessive capacity). This describes the hospital and healthcare industry well. (Hilsenrath, 1991) There is no price competition for any customer because emergencies often dictate and necessitate the geographic accessibility for help. People seek aid without price competition. It is doubtful that someone having a heart attack will negotiate the price of their treatment mid attack, much less transfer to a cheaper competitor several miles away. However, this is kept in check by government oversite and regulations and if it were not, the hospitals would keep raising their prices encouraging additional hospitals to be built. This would translate into excessive overcapacity and the need to raise prices to cover the fixed costs of maintaining so many hospitals and staff that mostly sit idle waiting for patients. (Hilsenrath, 1991). Healthcare seems to also demonstrate some form of Monopolistic competition and not a true Monopoly. In a monopoly, entry into the sector is restricted and exit is also highly regulated as government regulations dictate everything from staffing ratios to acceptable infection rates. Yet the healthcare products are unique and public utility have to be taken into consideration. Of note, profit is reduced (regulated) by the government. This is slightly different in a monopolistic competition and the healthcare industry seems to adopt this. In this competition, there is slight product differentiation (stroke centers vs. a children’s hospital) this is necessary otherwise the “product” is easily replaceable and beatable in the market. Because there are few sellers but less than oligopoly, Product differentiation is relatively easy to do and “product” differentiation can drive market share and resultant profits. So, what opportunities exist in a monopolistic competition for a hospital? As mentioned, if there is excess capacity in a hospital, the equilibrium quantity is smaller than the lowest cost quantity at the minimum point on the average cost curve. The hospital could provide care at a lower cost by increasing services to the level where average costs are minimized. This could be effective provided the government loosened some of its over site instead of micromanaging medicine. The government has yet to figure out the regulations cause a higher than marginal cost pricing (P> MC).

What can be done differently?

You’ve been assigned to set the price at the local movie theater. You know that market demand can be broken into two groups, students and non-students. Those functions are: Students: p = 12 − 1/4q Non-Students: p = 22 − q (if you aggregated those functions, you would obtain p = 22 − q if p > 12 and p = 14 −1/5q if p ≤ 12). You’ve also been given the total cost and marginal cost for the theater. TC = 6 + 2q + q^2, MC = 2 + 2q

a) Plot the inverse demand curves for students and non-students. Make sure to also include both marginal revenue curves and supply curves, as well as labeling correctly.

b) Now, let’s assume that you can only charge one price for tickets. What is the equilibrium price, quantity and profits if you choose to act as a monopolist?

c) You’ve decided to try price discrimination for each group. What is the equilibrium price and quantity for students and non-students? What is your new total profit? Round answers to two decimal places.

d) Do the prices in part (c) make sense? Why would the price for one group be higher than the price for the other group?

e) What kind of price discrimination is this? Is there any way you can prevent arbitrage in this case? If so, how? Why is it important to prevent arbitrage in price discrimination?

EJH Cinemas, a movie theater next to your university, attracts two types of customers: those who are associated with the university (students, faculty, and staff) and locals who live in the surrounding area. There are 10,000 university customers interested in purchasing movie tickets from EJH Cinemas, with a maximum willingness to pay of $7 per ticket. There are 20,000 local customers interested in purchasing tickets, with a maximum willingness to pay of $9 per ticket. The movie theater incurs a constant marginal cost of $4 per ticket. For simplicity, assume each customer purchases, at most, one ticket.

a. What will be the amount of EJH Cinemas’ total revenue if the price is $7 per ticket?

b. What is the amount of consumer surplus if the price is $7 per ticket?

c. What will be the amount of EJH Cinemas’ total revenue if the price is $9 per ticket?

d. What is the amount of consumer surplus if the price is $9 per ticket?

e. If EJH Cinemas decides to practice price discrimination, charging $9 for a standard ticket available to everyone but only $7 for a ticket if you show your university identification (students, faculty, and staff), what will be the movie theater’s total revenue?

f. If EJH Cinemas decides to practice price discrimination, charging $9 for a standard ticket available to everyone but only $7 for a ticket if you show your university identification (students, faculty, and staff), what will be the amount of consumer surplus?

g. If you were in charge of EJH Cinemas, what pricing scheme should you use?

please show the solution.

how to create a function to compute PACF of a time series in MATLAB without using built-in function ''parcorr''?

How do I prepare a budget for a new plant being built compared to the existing plant data

Kay listens to either classical or country music every day while she works. If she listens to classical music one day, there is a 57% chance that she will listen to country music the next day. If she listens to country music, there is a 75% that she will listen to classical music the next day.

. All of the same information about Kay's listening habits remain true. However, suppose you know the additional fact that on a particular Monday the probability that she is listening to classical music is 0.2. (e) Based on your additional knowledge that there is a 0.2 probability that she is listening to classical music on Monday, what is the probability she will be listening to country music on Wednesday? (f) Based on your additional knowledge that there is a 0.2 probability that she is listening to classical music on Monday, what is the probability that she will be listening to classical music on Thursday?

Lab Analysis: Diagnosing Patients

Based on the data collected, interpret the heath conditions observed in all 4 patients. Please highlight any measurements outside of a normal range, any possible diagnoses and possible treatments.

for all patients :

Tests outside of normal range:

Possible Diagnosis:

Possible Treatment:

The following times series shows the demand for a particular product over the past 10 months.

a.   Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 11.

b.   Develop a three-week moving average for this time series. Compute MSE and a forecast for month 11.

c.   Use α = 0.2 to compute the exponential smoothing values for the time series. Compute MSE and a forecast for month 11.

d. Compare the three-week moving average forecast with the exponential smoothing forecast using α = 0.2. Which appears to provide the better forecast based on MSE? Explain.d.

Lopez Company paid wages of $178,200 this year. Of this amount, $107,500 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for lopez Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent.

a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions
$

b. Amount that lopez Company would pay to the federal government for its FUTA tax
$

c. Amount that the company lost because of its late payments
$

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During 2017, lopez worked for two different employers. Until May, he worked for M Construction Company in, Iowa, and earned $21,210. The state unemployment rate for lopez is 4.6%. He then changed jobs and worked for Hugh Improvement Company in kansas, and earned $28,200 for the rest of the year. The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company. Round your answers to the nearest cent.

Use Figure 5.1 to determine SUTA caps in Iowa and Kansas