CASE ANALYSIS
Instruction: Use graphing paper for a and b requirements and for c, d, and e requirements use the space here.
Objective: To analyze the problem, apply the formula of price elasticity, and make decisions and recommendations based on the result of the computation.
CASE PROBLEM - PRICE ELASTICITY
Dr. Natin is a Pediatrician. He has two clinics located in Makati and in Quezon City. His problem is to know how he can earn more at the same time improve and extend his services to his entire patient. His employee (secretary) who happened to be a business administration graduate was given the task to provide statistics of all his client for the last three (3) months of operation without an increase in Consultation Fee and the statistics for the last 3 months when the new Consultation Fee was in effect. Therefore, the Doctor needs to know the response of his patient by comparing the two statistics presented to him by his secretary. The response must be measured mathematically using statistics method and economics method to determine such response while computing Total Revenue is needed to provide information on how much amount does the clinic earned without or with an increase in Consultation Fee.
Other Information:
Previous Statistics --------------- an average of 18 patients per day for the last 3 months at Php 350 CF.
Present Statistics ---------------- an average of 7 patient per day for the last 3 months for the new rate at Php 600 CF.
Consider that other things are held constant or equal.
Requirements: ( 4 POINTS EACH)
Compute the response of Dr. Natin’s patient using the Statistics Approach.
Plot the data to show it graphically to Dr. Natin.
Make an analysis of the statistical result.
Explain to Dr. Natin your analysis from the statistical result and the advantages and disadvantages of using the previous CF and the latest CF.
Give your recommendation to Dr. Natin
Note: Please consider the total cost and total revenue in your decision making.
