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    Demonstrate Cost Benefit Analysis

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    The following is a cost function for clinic visits in a small inner city clinic:
    Quantity of visits Total Cost per Week
    0 $10
    1 $15
    2 $25
    3 $45
    4 $75
    5 $115
    6 $165

    a. Determine the marginal cost for each level of output.
    b. If the price per visit is given to be $25, at what level of visits will the maximum profit position be?
    What are the profits at this level?
    What is the quantity supplied?
    c. If the price per visit increases to $45, what will be the quantity supplied (assuming maximizing profits)?

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    Solution Summary

    The solution demonstrates cost benefit analysis for the given data.