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5.5 A community health center has assembled the following data cost and volume. Calculate its average and marginal costs for volumes ranging from 25 to

5.5 A community health center has assembled the following data cost and volume. Calculate its average and marginal costs for volumes ranging from 25 to 40. What patterns do you see?

Visits

Total Cost

20

$2200

25

$2250

30

$2300

35

$2350

40

$2400

Resident

Costs

80

$10,000

100

$11,000

120

$12,000

140

$13,000

5.6 Sweetwater Nursing Home has 150 beds. Its cost and volume data are as follows. Calculate its average and marginal costs for volume ranging from 100 to 140. What patterns do you see?

5.7 It takes a phlebotomist 15 minutes to complete a blood draw. The supplies for each draw cost $4, and the phlebotomist earns $20 per hour. The phlebotomy lab designed to accommodate 20,000 draws per year. Its rent is $80,000 per year. What are the average and incremental costs of a blood draw when the volume is 20,000? 10,000? What principle does your calculation illustrate?

5.8 How would the average and marginal costs change if the phlebotomists wage rose to $24 per hour? What principle does your calculation illustrate?

5.9 A new computer lets the phlebotomist complete a blood draw in 10 minutes. The supplies for each draw cost $4, and the phlebotomist earns $20 per hour. The phlebotomy lab is designed to accommodate 20,000 draws per year. Its rent is $80,000 per year. What is the marginal cost of a blood draw? What principle does your calculation illustrate?

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