What is the estimate of the marginal cost of the Phase 4 hospital services

What is the estimate of the marginal cost of the Phase 4 hospital servicesassuming, as given in the case, that 60 percent of the designated costsare fixed and the remaining costs are variable?2. Assume that the agreed-upon price is $90,000. What is the expected profiton the contract assuming that it brings in 20 new patients? (Assume fornow that no new fixed costs would be required.)3. Now assume that the additional patients will add $200,000 in total to theCenter’s fixed costs. Now what is the expected profit on 20 new patients?On 40 new patients? (No new fixed costs are required to support the secondgroup of 20 patients.)4. What role do the following factors play in the decision as to whether ornot to use marginal cost pricing on the new contract?a. Reimbursement amounts paid by current transplant third-party payers.b. The amount of excess capacity in the transplant unit.c. The potential reaction by current payers to a new, lower pricecontract.5. What is your final recommendation regarding the base rate for Phase 4hospital services that should be built into the contract?6. Should you worry only about the contract’s first year pricing, or shouldyou develop a long-term pricing strategy for TMC? What are some possiblefeatures of a long-term pricing strategy?7. Briefly describe how outlier payments might be handled to ensure that theCenter does not suffer large losses on outliers (patients with unusuallyhigh costs). (Hint: Cost outliers are identified by having costs thatexceed a specifiedthreshold. Then, in addition to the standard payment,the provider is reimbursement for somepercentageof the costs above thethreshold. For this question, you must choose a cost threshold and outlierpayment percentage.)