Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 fora pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-S$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18,1991: A2). Calculate the hospital's price/marginal cost ratio, its Lerner Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes itsprofit).What is Humana's price/marginal cost ratio?The price to marginal cost ratio is 12.41. (round your answer to two decimal places)What is its Lerner Index?Its Lerner Index is(round your answer to two decimal places)terAssutvMacBook AirDIIescF7F3F1F2F4F6@#3$%&147QWEYtabASDHKcaps lockVNMshiftfncontroloptioncommand

Given : Marginal Cost = $8.35 Price = $103.65

Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 for a pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18, 1991: A2). Calculate the hospital's price/marginal cost ratio, its Lemer Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes its profit). What is Humana's pricelmarginal cost ratio? The price to marginal cost ratio is 12.41. (round your answer to two decimal places) What is its Lerner Index? Its Lerner Index is (round your answer to two decimal places)

Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.65 for a pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, October 18, 1991: A2). Calculate the hospital's price/marginal cost ratio, its Lemer Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes its profit). What is Humana's pricelmarginal cost ratio? The price to marginal cost ratio is 12.41. (round your answer to two decimal places) What is its Lerner Index? Its Lerner Index is (round your answer to two decimal places)

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopoly

Section: Chapter Questions

Problem 3SQP

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