ECON 248 Lecture 2: Econ 2020A - 9 Sept 2019
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The American Hospital Association recommends that all providers use the following definitions when describing a patientâs condition: fair, serious, and critical. Costs for 15 patients admitted by Forest Lake Hospital of Madrid are listed below:
| Patient | Cost $ | D1 (1 if critical, 0 if not) | D2 (1 if serious, 0 if not) |
| 1 | 17,200 | 1 | 0 |
| 2 | 11,100 | 1 | 0 |
| 3 | 12,000 | 1 | 0 |
| 4 | 10,900 | 1 | 0 |
| 5 | 13,800 | 1 | 0 |
| 6 | 6,500 | 0 | 1 |
| 7 | 10,000 | 0 | 1 |
| 8 | 11,500 | 0 | 1 |
| 9 | 7,000 | 0 | 1 |
| 10 | 8,500 | 0 | 1 |
| 11 | 2,100 | 0 | 0 |
| 12 | 1,300 | 0 | 0 |
| 13 | 3,400 | 0 | 0 |
| 14 | 7,500 | 0 | 0 |
| 15 | 2,000 | 0 | 0 |
1. Write a linear regression model relating cost to patient condition.
2. Interpret the slopes of the à coefficients.
3. Are the difference between the means statistically different? Please explain.
Use the table below to calculate the marginal revenue.
|
Price |
Quantity Demanded |
Total Revenue |
|
5 |
0 |
0 |
|
4.5 |
1 |
4.5 |
|
4 |
2 |
8 |
|
3 |
3 |
9 |
|
3 |
4 |
12 |
|
2.5 |
5 |
12.5 |
|
2 |
6 |
12 |
|
1.5 |
7 |
10.5 |
|
1 |
8 |
8 |
|
0.5 |
9 |
4.5 |
|
0 |
10 |
0 |
| Quantity | Total Cost | Average Cost | Marginal Cost |
| 0 | $4 | $4 | $5 |
| 1 | $9 | $9 | ($3) |
| 2 | $13 | $7 | ($1) |
| 3 | $16 | $5 | ($1) |
| 4 | $18 | $5 | ($0) |
| 5 | $22 | $4 | $0 |
| 6 | $28 | $5 | $0 |
| 7 | $36 | $5 | $1 |
| 8 | $46 | $6 |
Question 13: Find the monopolist's equilibrium quantity
Question 14: What is the equilibrium price?
Question 15: What is the firm's fixed cost?
