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A large corporation that runs nursing homes estimates that changes to Medicare will result in lower payments by Medicare to nursing homes for short-term stays by patients that require therapy or care upon leaving hospitals. Assume the corporation is considering expanding the number of "Beds" it offers at its nursing homes.Given the changes to Medicare, if the marginal benefit of offering an additional bed is $5,000 and the marginal cost is $6,000 per bed, then the corporation __________ (should / should not) offer additional beds.

Respuesta :

estryzy

Answer:

Should not

Explanation:

From the question, marginal cost exceeds the marginal benefit to be derived from the addition of beds.

Thus MC > MB

This means that it will cost the Corporation more to expand the number of beds than the benefits that they will derive from adding this feature. This shows that they are better off avoiding the addition of beds as this would make them to run at a loss. Hence, they should not offer additional beds.

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