TABLE 1 Summary of Dr. Ashwen's Costs $12,195 5,700 6.100 7.250 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 $1.450 210 844 2.220 550 TABLE 2 Summary of Dr. Ashwen's Revenues Chiropractic revenue (average) [Time per treatment = 10 minutes] $75 per treatment AET revenue [Time for two treatments = 15 minutes] $50 per treatment $50 per treatment NERT revenue [Time for eight treatments = 15 minutes] Percent of revenue from chiropractic treatments Percent of AETS Percent of revenue from NERTS 75% 15% 10% 4) What are the relevant costs associated with Dr. Ashwen's decision to accept or reject Bernard's proposal? For instance, is the cost of Dr. Ashwen's house relevant? What about the portion of the payment associated with her office space? The cost of her education, or the cost of learning NERT? Cost of anything else? (2 points) 5) What do you believe is a fair price for NERT? Do you think Bernard's offer is too high, low, just right, or totally inappropriate? Can you figure out how he determined his offer price? (2 points) 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) TABLE 1 Summary of Dr. Ashwen's Costs $12,195 5,700 6.100 7.250 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 $1.450 210 844 2.220 550 TABLE 2 Summary of Dr. Ashwen's Revenues Chiropractic revenue (average) [Time per treatment = 10 minutes] $75 per treatment AET revenue [Time for two treatments = 15 minutes] $50 per treatment $50 per treatment NERT revenue [Time for eight treatments = 15 minutes] Percent of revenue from chiropractic treatments Percent of AETS Percent of revenue from NERTS 75% 15% 10% 4) What are the relevant costs associated with Dr. Ashwen's decision to accept or reject Bernard's proposal? For instance, is the cost of Dr. Ashwen's house relevant? What about the portion of the payment associated with her office space? The cost of her education, or the cost of learning NERT? Cost of anything else? (2 points) 5) What do you believe is a fair price for NERT? Do you think Bernard's offer is too high, low, just right, or totally inappropriate? Can you figure out how he determined his offer price? (2 points) 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)
