The Figure Given Below Represents Demand for and Supply of Hospital

question 46

Multiple Choice

The figure given below represents demand for and supply of hospital beds in Anytown, U.S.A. , as shown by curves D and S₁ in the following figure.If the hospital receives permission to expand, its new supply curve will be S₂.Price level P₁ is the fixed prospective payment reimbursement rate paid by Medicare to the hospital, regardless of actual cost. Figure 32.3 Based on the information given in Figure 32.3, in order to increase its occupancy rate prior to the expansion, this hospital should:

• A)discourage comparison-shopping by prospective patients.
• B)give financial incentives to doctors without privileges to admit patients.
• C)increase the number of beds.
• D)eliminate its advertising budget.
• E)lower its price for certain cost-effective medical procedures.

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Definitions:

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