Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry
A) variable costs are increasing.
B) fixed costs are increasing.
C) long run average total cost is decreasing.
D) productivity is increasing.

Question

Quizplus · Accepted Answer

Variable costs are increasing because wages for nurses and doctors are considered variable costs, which fluctuate with the level of services provided.

Health Care Costs Rose More Than 10 Percent in 2011