Answer to Question #152757 in Management for SM

Question #152757
The Qwik Serve Walk-In Clinic always has three M.D.s and eight R.N.s working at its
24-hour clinic, which serves customers with minor emergencies and ailments. The
clinic has hired an efficiency expert to examine its operations and make suggestions for
reducing costs.
For some of the medical procedures done at the clinic, experienced nurses can perform the medical tasks approximately as well as the physicians can, as long as the
nurses are supervised by M.D.s. Since M.D.s are more highly trained than nurses, the
marginal product of M.D.s is higher than the marginal product of R.N.s.
The manager of the clinic is confused by the efficiency consultant’s report because
the report recommends using more R.N.s and fewer M.D.s to lower the cost of providing a given level of medical services. Under what circumstances would it be economically efficient for this clinic to use more R.N.s and fewer M.D.s (given MPMD ˃ MPRN)?
Expert's answer
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