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In deciding to continue (or discontinue) a service whose revenues do not cover initial cost, which is more important in the short run, variable cost or fixed cost? In the long run? Why? Finally, would the rationale for your answers be different for a non health care institution?

1. Cite specifically from attached Mclean c 7

1. In deciding to continue (or discontinue) a service whose revenues do not cover initial cost, which is more important in the short run, variable cost or fixed cost? In the long run? Why? Finally, would the rationale for your answers be different for a non health care institution?

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1. In deciding to continue (or discontinue) a service whose revenues do not cover initial cost, which is more important in the short run, variable cost or fixed cost? In the long run? Why? Finally, would the rationale for your answers be different for a non health care institution?

In deciding to continue a service whose revenues do not cover initial cost, in the short run, the variable cost is most important. Why? In the short run if the contribution from the service is greater than the variable cost the service should be continued other wise it should be terminated. What is the reason? By definition, in the short run the fixed cost cannot ...

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