You serve 3,000 commercial patients and 1,000 HMO members. Your fixed costs are $50,000 and your incremental cost is $50. You currently charge private pay patients $75 and HMO members $60.

This line of business is profitable.

Profits would increase if you stopped serving HMO members.

You should stop serving HMO members if fixed costs increased to $60,000.

All of the above