Table goes with questions A AND B Average Total Cost Number of Beds Q=100 Q=200 Q=300 Q=400 Q=500 50 $250 $200 $350 $500 $900 100 $300 $180 $150 $200 $400 150 $500 $270 $120 $150 $180 200 $700 $400 $200 $100 $110 The fixed input by which the size of hospitals is often determined is number of beds

Table goes with questions A AND B

Average Total Cost

Number of Beds Q=100 Q=200 Q=300 Q=400 Q=500

50 $250 $200 $350 $500 $900

100 $300 $180 $150 $200 $400

150 $500 $270 $120 $150 $180

200 $700 $400 $200 $100 $110

The fixed input by which the size of hospitals is often determined is number of beds. The table above shows the short-run average total cost associated with four different-sized hospitals (50, 100, 150, and 200 beds). For each hospital size, short-run average total cost is based on how many patients are admitted per week (for instance, a hospital with 150 beds and Q=100 patients admitted per week has short-run average total cost of $500). Consider a 100-bed hospital that admits 300 patients per week.

A. What is the hospital?s short-run average total cost per patient?

1) $180

2) $120

3) $400

4) $150

B) Suppose the hospital expects admissions to increase to 400 patients per week over the long run. As a result, in the long run, we would expect the hospital to have _ beds.

1) 150

2) 50

3) 100

4) 200