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Price-setting

Question:Using the questions below, can you provide samples that I can follow to resolve similar questions?For the following three problems, start with the price-setting example from the text. The initial assumptions are provided in the table below.Total cost$100,000Total volume1,000Average cost$100Payer volumesMedicare (payment rate = $95)400Medicaid (payment rate = $75)100Managed Care # 1                                           (payment rate = $110)300Managed Care # 2                                 (pay 80% of charges)100Uninsured (pay 10% of charges)100Total all payers1,000Desired net income$5,0006.  Start with the original assumptions. Notice that managed care plan #1 receives a much lower price in return for sending a larger volume of patients. Managed care plan #2 (MC#2) wants to pay a lower cost per case and is willing to send 250 more patients (350 total from MC#2) to the clinic in return for a rate of $110 per case. Assume that the average cost per case drops to $90 due to the economies of scale. All other assumptions are unchanged. What is the new required price?

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