Question: 11.13. A clinics average and marginal cost per case is $400. It charges $600 per case and serves 1,000 customers. Its marketing team predicts that

11.13. A clinics average and marginal cost per case is $400. It charges $600 per case and serves 1,000 customers. Its marketing team predicts that it will expand its sales to 1,250 if it signs a contract for a price to $550 with a local HMO. How do profits change if it does so? What is the firms marginal revenue? Why is marginal revenue different than in the previous Exercise?

Table 11.13

*Price*	*Volume*	*Revenue*	*Change in Volume*	*Change in Revenue*	*Marginal Revenue*
$600	1,000	$600,000
$550	250	$137,500	250	-$12,500	$550

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