6) Should Dr. Ashwen accept Bernard's offer? Does it make any difference if her waiting room is empty or full? (2 points) 7) Dr. Ashwen is charging Mr. Crandall different rates per hour for AET and NERT, two procedures tha have the same operating cost per hour. Is it fair, just honorable, honest, ethical, legal, or at all appropriate to charge different prices to patients suffering from different ailments when the operating cost of treating the different ailments is the same (which appears to be true in the current case)? This question might be more easily answer by considering a more familiar hypothetical example: would it be fair to charge a patient suffering from cancer more than a patient suffering from indigestion if the operating costs of the treatments provided to both patients were the same? (Note: operating costs refer to those costs required to currently run and operate the clinic.) (2 points) Bernard Crandall's Proposal to Dr. Ashwen Although Bernard was quite happy with the treatments that he had received from Dr. Ashwen using NERT, he was concerned about the cost. So, before his next visit, he researched the market price for NERT. One of the alternative medicine practitioners Bernard had visited in the past was Dr. Greco, who practice was a twelve-hour drive away in another state (Bernard had recently moved). Dr. Greco had a national and international reputation as an alternative medicine provider because he traveled 20 weekends per year teaching seminars, at least one of which Dr. Ashwen herself attended. So, Dr. Greco was very reputable, and he treated patients using NERT, charging only $10 per treatment. While sitting in Dr. Ashwen's treatment room, he told her that he wishes to receive NERT but that he is only willing to pay $12.50 per treatment for a total of $100 for eight treatments. Place yourself in Dr. Ashwen's position. How should she respond to Bernard's request? What costs are relevant for Dr. Ashwen's decision about whether to accept or reject Bernard's proposal? Alternative medicaine providers were not so rare that Dr. Ashwen did not have competition. While Bernard was unaware of any other skilled providers for either treatment, Dr. Ashwen was aware that other skilled providers for both treatments were available, both with lower prices and a shorter drive from Bernard's home. TABLE 1 Summary of Dr. Ashwen's Costs One-Time Costs (Paid in Full) Purchased treatment table Purchased other miscellaneous equipment Fees and travel incurred for training in AET Fees and travel incurred for training in NERT Recurring (Monthly) Expenses House payment (monthly rent) Misc. house-related fees (utilities, etc.) (average) (monthly) Student loan payment (monthly) (30-year loan, 8% interest) All other living expenses (average) (monthly) Part-time secretary (monthly) $12,195 5,700 6,100 7,250 $1,450 210 844 2,220 550 TABLE 2 Summary of Dr. Ashwen's Revenues $75 per treatment Chiropractic revenue (average) [Time per treatment = 10 minutes) AET revenue [Time for two treatments = 15 minutes] NERT revenue [Time for eight treatments = 15 minutes) $50 per treatment $50 per treatment Percent of revenue from chiropractic treatments Percent of AETS Percent of revenue from NERTS 75% 15% 10% 6) Should Dr. Ashwen accept Bernard's offer? Does it make any difference if her waiting room is empty or full? (2 points) 7) Dr. Ashwen is charging Mr. Crandall different rates per hour for AET and NERT, two procedures tha have the same operating cost per hour. Is it fair, just honorable, honest, ethical, legal, or at all appropriate to charge different prices to patients suffering from different ailments when the operating cost of treating the different ailments is the same (which appears to be true in the current case)? This question might be more easily answer by considering a more familiar hypothetical example: would it be fair to charge a patient suffering from cancer more than a patient suffering from indigestion if the operating costs of the treatments provided to both patients were the same? (Note: operating costs refer to those costs required to currently run and operate the clinic.) (2 points) Bernard Crandall's Proposal to Dr. Ashwen Although Bernard was quite happy with the treatments that he had received from Dr. Ashwen using NERT, he was concerned about the cost. So, before his next visit, he researched the market price for NERT. One of the alternative medicine practitioners Bernard had visited in the past was Dr. Greco, who practice was a twelve-hour drive away in another state (Bernard had recently moved). Dr. Greco had a national and international reputation as an alternative medicine provider because he traveled 20 weekends per year teaching seminars, at least one of which Dr. Ashwen herself attended. So, Dr. Greco was very reputable, and he treated patients using NERT, charging only $10 per treatment. While sitting in Dr. Ashwen's treatment room, he told her that he wishes to receive NERT but that he is only willing to pay $12.50 per treatment for a total of $100 for eight treatments. Place yourself in Dr. Ashwen's position. How should she respond to Bernard's request? What costs are relevant for Dr. Ashwen's decision about whether to accept or reject Bernard's proposal? Alternative medicaine providers were not so rare that Dr. Ashwen did not have competition. While Bernard was unaware of any other skilled providers for either treatment, Dr. Ashwen was aware that other skilled providers for both treatments were available, both with lower prices and a shorter drive from Bernard's home. TABLE 1 Summary of Dr. Ashwen's Costs One-Time Costs (Paid in Full) Purchased treatment table Purchased other miscellaneous equipment Fees and travel incurred for training in AET Fees and travel incurred for training in NERT Recurring (Monthly) Expenses House payment (monthly rent) Misc. house-related fees (utilities, etc.) (average) (monthly) Student loan payment (monthly) (30-year loan, 8% interest) All other living expenses (average) (monthly) Part-time secretary (monthly) $12,195 5,700 6,100 7,250 $1,450 210 844 2,220 550 TABLE 2 Summary of Dr. Ashwen's Revenues $75 per treatment Chiropractic revenue (average) [Time per treatment = 10 minutes) AET revenue [Time for two treatments = 15 minutes] NERT revenue [Time for eight treatments = 15 minutes) $50 per treatment $50 per treatment Percent of revenue from chiropractic treatments Percent of AETS Percent of revenue from NERTS 75% 15% 10%