Economics of Hospitals

See Hospital Behaviour, Hospital Costs, Hospital Economics. Economies of Scale

This is a result of increasing returns to scale: the amount of resource used per unit of output falls at higher output rates. It implies a falling unit cost as

Effect Modification 109

output rates increase, so long as input prices do not increase so as to offset the scale effect, as they might if the organization in question is a principal user of a resource and there is a degree of monopsony. Diseconomies of scale are the contrary phenomenon. See Production Function.

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