Maintenance Cost at a Hospital Was Observed to Increase as Activity

question 152

Multiple Choice

Maintenance cost at a hospital was observed to increase as activity level increased. The following data was gathered: Activity Level - Maintenance Cost Month Patient Days Incurred January 5,600 $7,900 February 7,100 $8,500 March 5,000 $7,400 April 6,500 $8,200 May 7,300 $9,100 June 8,000 $9,800 If the cost of maintenance is expressed in an equation, what is the independent variable for this data?

• A) Fixed cost.
• B) Variable cost.
• C) Total maintenance cost.
• D) Patient days.

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Definitions:

Marginal Revenue

The additional revenue a firm receives from selling one more unit of a good or service.

Pure Monopolist

A single seller in a market with no close substitutes for its product, setting the market price and output level.

Seventh Unit

A term that could refer to the incremental unit in a sequence, often used in contexts where items are categorized or measured in units.

Nondiscriminating Monopolist

A monopolist that charges the same price to all consumers for its product, instead of setting different prices for different customers.