In figure 15-5, suppose for each patient that marginal cost = $100 and estimates of utilizations rat


Question: In figure 15-5, suppose for each patient that marginal cost = $100 and estimates of utilizations rates are R1 = 1, R2 = 2, and R3 = 3. Suppose also that one-third of the physicians use treatment levels R1, R2, and R3, each. What would be the “cost per patient” of SAV, if all of the demand curves have slopes of -50? (Hint: Use the parameter estimates to figure out the sizes of triangles A and B.)

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