Expand/Reduce Decision. Laurie Vaden is a nurse practitioner with her own practice. She has developed contracts with several large employers to perform routine physicals, fitness for duty exams, and initial screening of on-the-job injuries. She currently sees 150 patients per month, charging $50 per visit.

Her total costs are $7,500, of which $1,500 is for supplies. She has decided that she needs to increase profit, so she is considering raising her fee to $65.

She expects to lose 10 percent of her business to competitors that charge an average of $60 per visit. Determine her current and predicted: 1) revenues, 2)

variable costs, and 3) total contribution margin. What do you recommend she do?

Why?