Your dental clinic provides 3000 exams for private pay patients and 1000 exams for members of a un Show more Your dental clinic provides 3000 exams for private pay patients and 1000 exams for members of a union.

Your dental clinic provides 3000 exams for private pay patients and 1000 exams for members of a un Show more Your dental clinic provides 3000 exams for private pay patients and 1000 exams for members of a union.

Your fixed costs are $50000 and your incremental cost is $40. A. Private pay patients have a price elasticity of demand of -3. What do you charge them? B. The union has negotiated a fee of $50. Is it profitable to treat members of the union? C. What would happen to your profits if you stopped treating members of the union? D. If the union negotiated a fee of $45 instead what would you charge private pay patients? E. What does this tell you about cost shifting versus price discrimination? Show less

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