Which ofthefollowingcircumstances mightaﬀecttheprices charged
byayoung doctor just out of
medical school and why? a)The high cost of tongue depressors .b) The high cost of X-ray
machines (assume that every doctor must haveone X-ray machine in his office). c)The high cost
of a medical education.d)The fact that
this particular young doctor is heavily in debt due to student loans.e)The doctor’s discovery that hisloan payments
will be higher than hehad expected.f)The fact that only a limited number ofpeople are
permitted tobecome doctors g) An epidemic.h)The fact that this doctor hasrecently been sued
for malpractice.Fortunately for him, the public is unaware of the lawsuit, but
unfortunately for him, his insurance company is
well aware of it and has raised his rates.
i) It becomes generally known that this doctor’s
insurance company has raised his rates. j)Malpractice insurance rates for
all doctors go up.k) The doctor
in the office next door suffers fatal consequences when heattempts to remove his own
appendix. l)The doctor decides to join avery expensive country club.
a. Would affect as it affects the amount that the doctor can supply. b. Would not affect the price as it is a fixed cost. c. Would not affect the price as it is a sunk cost. d. Would not affect the price as it is a sunk cost. e. Would not affect he price as it is a fixed cost, but would reduce his profit. f. Would influence the price as the license acts as a barrier to entry. g. Would influence the price as the demand would shift to the right causing a higher price. h. Would not affect the price as this is a fixed cost. However, all relevant information is not included in the price and will change the price in the future as information becomes public. i) Would affect the price as there would be a change in demand that shifts the curve to the left. j) Would not affect the price. k) Would affect the price as the number of competitors decrease and he would be able to differentiate his product. l.) This would not affect the price. If this doctor raises his prices then other doctors will be substituted for him. This is not a relevant cost to the business.