ECONOMICS

Economics



For a single nonprofit provider, describe an output-maximizing model to predict supplier behavior.

The assumptions of the model can fall into three categories, Cost assumptions, revenue assumptions, and assumptions regarding the objective of the organization. With regards to the revenue, we will make the assumption that the ABC nonprofit company is a price taker, as in on the price of its output, a supplier has no influence. As for the cost we will make the assumption that there are both, the variable cost and the fixed cost. Finally, since the organization is a nonprofit company, the reimbursements can be assumed ...