Explain why acme hospital produces at a higher cost

Reference no: EM132198992

Question: Suppose that you are interested in comparing the costs of producing inpatient services at Saving Grace Hospital with those at ACME Hospital. Further suppose that the two hospitals annually admit about 24,000 and 32,000 patients, respectively, at average short-run total costs per admission of roughly $11,000 and $12,000. Suppose that these cost figures accurately reflect the economic costs of providing inpatient services at these two hospitals and that the two hospitals face the same average total cost curve. Draw a graphical representation of the average total cost curve (only) and graphically show and verbally explain why ACME Hospital produces at a higher cost than Saving Grace Hospital.

Reference no: EM132198992

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