The Qwik Serve Walk-In Clinic always has three M.D.s and eight R.N.s working at its 24-hour clinic,
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For some of the medical procedures done at the clinic, experienced nurses can perform the medical tasks approximately as well as the physicians can, as long as the nurses are supervised by M.D.s. Since M.D.s are more highly trained than nurses, the marginal product of M.D.s is higher than the marginal product of R.N.s.
The manager of the clinic is confused by the efficiency consultant’s report because the report recommends using more R.N.s and fewer M.D.s to lower the cost of providing a given level of medical services. Under what circumstances would it be economically efficient for this clinic to use more R.N.s and fewer M.D.s (given MPMD > MPRN)? Explain.
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Related Book For
Managerial Economics Foundations of Business Analysis and Strategy
ISBN: 978-0078021718
11th edition
Authors: Christopher Thomas, S. Charles Maurice
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