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A hospital has an operating room used only for eye surgery. The annual cost of heat, rent, and electricity for the operating room and its
A hospital has an operating room used only for eye surgery. The annual cost of heat, rent, and electricity for the operating room and its equipment is $180,000 and the annual salaries for the people who staff this room total $270,000. Each surgery performed requires the use of $380 worth of medical supplies and drugs. Every patient receives a $15 bouquet of owers the day after surgery. Also, one-quarter of the patients receive a $20 pair of dark glasses. 5. An advertising agency has proposed to the hospital administration that $120,000 per year be spent on advertising to persuade people to use the hospital. The agency estimates that this advertising would increase the business by 480 operations per year. What impact would this advertising have on the hospital's profits? (Hint: Compare the yearly prot without advertising with the profit using advertising.)
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