Determining break-even price in a reduce-or-expand decision. QuickCare is a heal

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Determining break-even price in a reduce-or-expand decision. QuickCare is a health care franchise that functions as a primary family health clinic, seeing unscheduled patients twenty-four hours a day. Several months after the grand opening, a corporate office management engineering study showed that the clinic was experiencing some dips in volume in the midafternoon hours. To increase volume, efficiency, and revenues, the clinic administrator contracted with the area high schools to provide after-school physicals for the sports teams. The initial agreement was that QuickCare would charge $100 per exam, the market average. Fixed costs were $30,000 and variable costs are $25 per physical. Although this strategy proved somewhat successful, gross profit margin lagged behind the corporate expectations. To improve margins, the clinic is considering increasing the exam price to $125. QuickCare

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