Business Finance Homework Help

4. Mr. Lucas referred to a national study of copayment levels. The important results of this study are provided in Exhibit 3.

a. Calculate the price elasticity of demand for physician visits at each copayment level using the arc method. What does the data tell you about the price elasticity of demand for physician visits? How does this information help Mr. Fleming in making his decision?

undefined

b. Using the six months of data provided in the Excel data file, simulate the profitability of the physician services department if copayments are increased to $20 per visit. Repeat your analysis using a copayment of $25 per visit.

Please make sure you read the case and answer the questions based on the case. Also, check slides 8 and 9 to refer your answers to it. Provide charts to each answer to show the work.