2. Health clinic

A startup health clinic has opened in Pflugerville, TX that provides health services to low income

clients. Assume that the market for health services is perfectly competitive. The clinic rents the

building and medical equipment for $100/day under a 3-year lease. The daily staffing costs of

operating the clinic are detailed in the table below.S

a. Calculate total cost, average variable cost, average total cost, and marginal

cost for the startup. Add your answers to the table.

b Suppose that the market price for a clinic visit in Pflugerville is $18. In the

short run will the clinic shut down? Explain why or why not.

c. Assume that all health clinics in Pflugerville face the same costs as the startup.

If the price for a clinic visit stays at $18, describe in words what will happen in the

market for health services in Pflugerville in the long run.