Part C The long-run

Assume that the 4-A Clinic is at capacity with the workers you hired above. To expand further, some adjacent office space would need to be leased and new equipment would need to be added. The fixed costs associated with this are shown below. The patient-equivalents are total patients seen, not the increase in patient.

Patient- equivalents	Increased in fixed costs per day
50	$0
70	$2500
90	$4000
100	$6000

Other assumptions (so that wrong answer from 1-7 dont effect your answers below):

The marginal cost (labor, operating costs, and consumables, but not the fixed costs) of seeing another patient-equivalent is $150.

The revenue from a patient-equivalent is fixed at $300.

Calculate the average incremental fixed cost per patient for

1. An increase from 50 to 70 patients
2. An increase from 70 to 90 patients
3. An increase from 90 to 100 patients
4. In expanding the clinic, which is most profitable?

1. Stay at 50 patients.
2. Expand to 70 patients
3. Expand to 90 patients
4. Expand to 100 patients.