3. Cardiac care A cardiac (heart) care center in Denver that specializes in open heart surgery announced that it was discounting its fees for this procedure. The rationale given was that the market had become national and that competition was coming from all regions of the country. It lowered its fee from $40,000 to $35,000. As a result of the fee reduction, the Denver center expected the number of such procedures to rise from 200 to 240 per year. Assume that the average variable cost of a procedure is a constant $20,000. 10 a. The increasingly national scope of the market for such surgery is most likely to result in which of the following: (circle one) a. A higher demand for each competitor b. A lower demand for each competitor c. A greater elasticity of demand at the current fee for each competitor d. A smaller elasticity of demand at the current fee for each competitor e. A more inelastic supply of these procedures b. is the expected elasticity of demand for this procedure. (In your calculation, take the original price/quantity combination as the base. That is, do not compute an arc elasticity figure.) (Two decimal places, please.) is the elasticity of demand that is required for the center just to break even on the fee cut, assuming that the AVC is $20,000. (Two decimal places, please.) d. The fee reduction from $40,000 to $35,000 will (reduce, increase, maintain) profits for the center. e. Given the expected actual elasticity of demand, $ would need to be the amount of the center's AVC were the center to just breakeven on the fee cut