Read “Real-World Scenario” at the beginning of Chapter 6 (pages 151–152). After reviewing the types of alternative investments discussed in our unit lesson, respond to the following prompts: Provide an answer to the three questions Gary has for Alice in the last paragraph of the scenario:
What is his marginal or incremental cost for the Antrim book of business?
Could his competitor handle his present Antrim volume and at what cost?
If Gary’s system were not in Antrim’s network, what percentage of his present Antrim volume would he retain?
Discuss at least one alternative Gary can consider for revenue if the Antrim contract is lost.
