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This question deals with the costs a hospital faces
This question deals with the costs a hospital faces.
a. What is the difference between short run costs and long run costs?
b, ciean ecumple ofa oar is fited n he for a hospital.
Expert Solution
Answer:
A?Short run cost are the cost to be incured by the hospital on the administation etc for the duration of 1 year . Where as long run cost are does cost which are incured for the duration of more than 1 year , generally for 5 years result expected . Short run are the peroid where some factors are fixed and some are variable factors . There by in short run costs are divided into fixed and variable cost however the producer ( manager ) have control only over the variable cost . And on long run all the factors becomes variable and every cost need to be covered by the management of the hospital .
B? cost incured on providing services to the patient , cost for the medical fecility , cost of electricity , cost of expansion of the hospital etc becomes variable cost on long run and all these cost need to be covered by the management of the hospital
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