variable cost rate, per-unit revenue, contribution margin, and fixed costs
Assuming the graphs are drawn to the same scale, consider the break-even
charts—cost-volume-profit (CVP) graphs—below for two competing providers operating in a fee-for-service environment.
On the basis of your understanding of variable cost rate, per-unit revenue, contribution margin, and fixed costs, answer the following questions:
- How would the given graphs change if the providers were operating in a discounted fee-for-service environment?
- How would these graphs change in a capitated environment? Which provider is in the best position to grow its business?
Provide reasons for and evidence in support of your responses.
Be sure to cite any relevant resources used in framing your responses. Apply APA standards to cite sources.
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