Griffin is an orthopedic surgeon and currently does all of h

Griffin is an orthopedic surgeon and currently does all of his surgeries at Hospital A Hospital B wants to steal griffin from Hospital A. to attract Griffin, Hospital B\'s CEO tells Griffin that she will pay for $2, 000 for each patient that Griffin brings to Hospital B. Suppose Griffin\'s marginal cost per patient is $4, 000. Hospitals A and B make $10, 000 per surgery. Patients have insurance that covers the full hospital bill not pay for physician services. Patient demand for Gain\'s surgeries is define as P = $10, 000-$20* Q, deputed in the figure with this kind of demand, the marginal revenue for Griffin\'s surgeries is P = $10, 000 - $40 * O, also depicted. In the graph above, draw the marginal cost curve if Griffin stays with Hospital A. Assuming Griffin stays with Hospital A and maximizes his profit, how marry surgery price that he sets? Assuming Griffin stays with Hospital A and maximizes his profit, what is the surgery price that he sets? Does a marginal revenue that Is negative mean that the practice\'s revenue is negative? Why or Why not? If Griffin deckles to go with hospital B and maximizes his profit, how many surgeries does he perform per year?

Solution

1.) Griffin would perform a minimum of 225 surgeries

2.) The price of the surgery would be set at 7500

3.)No it does not. Marginal revenue actually refers to the extra added cost for each extra patient. So negative value is not corellated to the direct profit the hospital is making.

4.) At the case of Griffin shifting to hospital B he would perform 2000 surgeries annually.