1:Americans spend more on smartphones than the citizens of other countries do, yet this type of spending is seldom described as a problem. Why is spending more on healthcare viewed differently?

2:A physical therapy clinic faces a demand equation of Q=200 - (1.5 x P).

a) The clinic currently charges $80. What is its sales volume and revenue?

b) If the clinic raised its price to $90, what would happen to its volume and revenue?

c) If the clinic lowered its price to $70, what would happen to its volume and revenue?

3:Your firm rents a supply management system to hospitals. You have received a buyout offer of $5 million. You forecast a 25% chance that you will have profits of $10 million, a 35% chance that you will have profits of $6 million, and a 40% chance that you will have profits of $2 million. Should you accept the offer? Explain.

4:The price elasticity of demand for the services of Kim Jones, MD, is -4.0. The price elasticity of demand for physicians' services overall is -0.1.

a) Why is demand so much more elastic for the services of Dr. Jones than for the services of physicians in general?

b) If Dr. Jones reduced prices by 10%, how much would volume and revenue change?

c) Suppose that all the physicians in the area reduced prices by 10%. How much would the total number of visits and revenue change?

d) Why are your answers to questions b & c so different?