Assumptions in Problem 3

Total cost	$100,000
Total volume	1,000
Average cost	$90
Payer volumes
Medicare (payment rate = $95)	400
Medicaid (payment rate = $75)	100
Managed Care # 1 (payment rate = $110)	300
Managed Care # 2 (payment rate $110)	350
Uninsured (pay 10% of charges)	100
Total all payers	1,000
Desired net income	$5,000

Start with the assumptions in problem 3. But now assume that the additional volume does not enable enough economies-of-scale to reduce the average cost per case as much as originally anticipated. Assume now that the average cost per case drops only to $95. What is the new required price? SHOW WORK