Question: The Free Health Care Center FH charges each patient
The Free Health Care Center (FH) charges each patient $ 5.50 (not quite free after all, but pretty close). Due to rising costs, the center has been forced to consider raising this charge to $ 6.00 or $ 6.50. If the price goes up, fewer people will come to the center for care. At a price of $ 6 only 18,000 patients are expected, and at a price of $ 6.50 there will likely be only 16,000 patient visits. Prepare a flexible budget for the FH at prices of $ 5.50, $ 6.00, and $ 6.50. The variable cost per patient is $ 4, and the fixed costs of operating the center are $ 32,000. They currently expect to have about 20,000 patient visits. What do you recommend the clinic do? Why?
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