Health Care Economics

Running head: HEALTH CARE ECONOMICS
Health Care Economics
Name of the Student
Name of the University
Course ID

1HEALTH CARE ECONOMICS
Table of Contents
Question a...................................................................................................................................2
Question b..................................................................................................................................2
Question c...................................................................................................................................3
Question d..................................................................................................................................4
References..................................................................................................................................5

2HEALTH CARE ECONOMICS
Question a
Total revenue of the firm is given as,
TR=10Q
Total cost of the firm is,
TC =1000+2 Q+ 0.01Q2
Given the total revenue and total cost profit of the firm can be obtained as
Profit ( π ) =TR−TC
¿ 10 Q−1000−2Q−0.01Q2
¿ 8 Q−1000−0.01 Q2
The first order condition for profit maximization requires
dπ
dQ =0
¿ , 8−0.02Q=0
¿ , 0.02 Q=8
¿ , Q=400
The firm will produce 400 units per annum if it aims at profit maximization.
Question b
Total profit at equilibrium can be computed as
Profit=8 Q−1000−0.01 Q2
¿ ( 8 × 400 ) −1000− ( 0.01 × 4002 )