Imagine you are the manager of a radiology clinic. You ask your management team to put together some numbers to see if it makes sense for your clinic to try and increase the number of MRIs done each month from 300 (what you do currently) to 400 (what you think you might be able to do with some outreach to local physicians). Your management team tells you that currently performing 300 MRIs per month at $2000 per MRI and that the total costs per month are $568,500. They calculate that to perform 400 MRIs per month, the price elasticity of demand tells them you can only charge $1800 per MRI and your total costs per month will be $718,000