Issue 39 Preventing pediatric medication errors Joint Commi.docx

Issue 39: Preventing pediatric medication errors | Joint
Commission
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Sentinel Event Alert
April 11, 2008
Issue 39, April 11, 2008
Preventing pediatric medication errors
Errors associated with medications are believed to be the most
common type of medical error and are a significant cause of
preventable adverse events. Experts agree that medication errors
have the potential to cause harm within the pediatric
population at a higher rate than in the adult population. For
example, medication dosing errors are more common in
pediatrics
than adults because of weight-based dosing calculations,
fractional dosing (e.g., mg vs. Gm), and the need for decimal
points.
“Research shows that the potential for adverse drug events
within the pediatric inpatient population is about three times as
high
as among hospitalized adults,” (1) says Stu Levine, PharmD,
informatics and pediatric specialist, Institute for Safe
Medication
Practices, an organization which serves as a resource for
information on how to improve medication practices. “For this
reason,

health care providers must pay special attention to the specific
challenges relating to the pediatric population.”
A new study—the first to develop and evaluate a trigger tool to
detect adverse drug events in an inpatient pediatric population
—identified an 11.1 percent rate of adverse drug events in
pediatric patients. This is far more than described in previous
studies. The study also showed that 22 percent of those adverse
drug events were preventable, 17.8 percent could have been
identified earlier, and 16.8 percent could have been mitigated
more effectively. (2)
Children are more prone to medication errors and resulting harm
because of the following:
Most medications used in the care of children are formulated
and packaged primarily for adults. Therefore, medications often
must be prepared in different volumes or concentrations within
the health care setting before being administered to children.
The need to alter the original medication dosage requires a
series of pediatric-specific calculations and tasks, each
significantly increasing the possibility of error.
Most health care settings are primarily built around the needs of
adults. Many settings lack trained staff oriented to pediatric
care, pediatric care protocols and safeguards, and/or up-to-date
and easily accessible pediatric reference materials, especially
with regard to medications. Emergency departments may be
particularly risk-prone environments for children. (3)
Children—especially young, small and sick children—are
usually less able to physiologically tolerate a medication error
due to
still developing renal, immune and hepatic functions.
Many children, especially very young children, cannot
communicate effectively to providers regarding any adverse
effects that
medications may be causing.

During calendar years 2006-2007, USP’s MEDMARX®
database shows nearly 2.5 percent of pediatric medication errors
led to
patient harm. The most common types of harmful pediatric
medication errors were: improper dose/quantity (37.5 percent),
omission error (19.9 percent), unauthorized/wrong drug (13.7
percent), and prescribing error (9.4 percent), followed by wrong
administration technique, wrong time, drug prepared
incorrectly, wrong dosage form, and wrong route. Medication
errors
involving pediatric patients were most often caused by:
performance deficit (43.0 percent), knowledge deficit (29.9
percent),
procedure/protocol not followed (20.7 percent), and
miscommunication (16.8 percent), followed by calculation
error, computer
entry error, inadequate or lack of monitoring, improper use of
pumps, and documentation errors. The MEDMARX Data Report
(4) reveals that approximately 32.4 percent of pediatric errors in
the operating room involve an improper dose/quantity
compared with 14.6 percent in the adult population and 15.4
percent in the geriatric population. A recent study indicates that
children are particularly at risk for chemotherapy medication
errors. (5)
Risk reduction strategies
Pediatric-specific strategies for reducing medication errors
include:
Standardize and identify medications effectively, as well as the
processes for drug administration.
Establish and maintain a functional pediatric formulary system
with policies for drug evaluation, selection and therapeutic
use. (6)

To prevent timing errors in medication administration,
standardize how days are counted in all protocols by deciding
upon a
protocol start date (e.g., Day 0 or Day 1).
Limit the number of concentrations and dose strengths of high
alert medications to the minimum needed to provide safe
care.
For pediatric patients who are receiving compounded oral
medications and total parenteral nutrition at home, ensure that
the
doses are equivalent to those prepared in the hospital (i.e., the
volume of the home dose should be the same as the volume
of the hospital prepared products).
Use oral syringes to administer oral medications. The pharmacy
should use oral syringes when preparing oral liquid
medications. Make oral syringes available on patient care units
when “as needed” medications are prepared. Educate staff
about the benefits of oral syringes in preventing inadvertent
intravenous administration of oral medications.
Commission
Ensure full pharmacy oversight—as well as the involvement of
other appropriate staff—in the verifying, dispensing and
administering of both neonatal and pediatric medications.
Assign a practitioner trained in pediatrics to any committee that
is responsible for the oversight of medication management.
Provide ready access, including website access, to up-to-date
pediatric-specific information for all hospital staff. This

information should include pediatric research study data,
pediatric growth charts, normal vital sign ranges for children,
emergency dosage calculations, and drug reference materials
with information about minimum effective doses and maximum
dose limits.
Orient all pharmacy staff to specialized neonatal/pediatric
pharmacy services in your organization. (7)
Provide a dosage calculation sheet for each pediatric critical
care patient, (8), (9) including both emergency and commonly
used medications. (7)
Develop preprinted medication order forms and clinical
pathways or protocols to reflect a standardized approach to
care.
Include reminders and information about monitoring
parameters.
Create pediatric satellite pharmacies or assign pharmacists and
technicians with pediatric expertise to areas or services such
as neonatal/pediatric critical care units and pediatric oncology
units. (1), (7) At a minimum, pediatric medications should be
stored and prepared in areas separate from those where adult
medications are stored and prepared.
Use technology judiciously.
Use methods to ensure the accuracy of technology that measures
and delivers additives for intravenous solutions, such as for
total parenteral nutrition.
If dose and dose range checking software programs are
available in hospital or pharmacy information systems, enable
them
to provide alerts for potentially incorrect doses.
Medications in automated dispensing cabinets that do not
undergo appropriate pharmacist review should be limited to
those
needed for emergency use and/or to those medications under the
control of a licensed independent prescriber, as specified in

Joint Commission standard MM 4.10.
Recognize that the use of infusion pumps, or smart pumps, is
not a guarantee against medication errors. Appropriate
education for nurses, pharmacists and other caregivers
regarding these technologies is important for all institutions
caring for
pediatric patients.
To prevent adverse outcomes or oversedation, use consistent
physiological monitoring – particularly pulse oximetry (10) –
while children are under sedation during office-based
procedures. Use age- and size-appropriate monitoring
equipment and
follow uniform procedures under the guidance of staff
appropriately trained in sedation, monitoring and resuscitation.
Providers are encouraged to develop bar-coding technology with
pediatric capability. Potential errors should be carefully
considered while adapting this technology to pediatric processes
and systems. For example, a pediatric bar-coding solution
must be able to provide readable code for small-volume,
patient-specific dose labels.
Existing Joint Commission requirements
As part of National Patient Safety Goal 2B, Joint Commission
accredited organizations are required to follow The Joint
Commission’s Official “Do Not Use” Abbreviations List. In
addition, Goal 3 (Improve the safety of using medications) and
Goal 8
(Accurately and completely reconcile medications across the
continuum of care) establish several medication standardization,
identification and communication requirements that are
especially important in pediatrics and neonatology. Three
Sentinel Event
Alerts also address specific issues relating to pediatric
medication errors. (11), (12), (13)

Other Joint Commission suggested actions
The Joint Commission offers the following suggested actions to
prevent pediatric medication errors and their related adverse
events in pediatric care settings:
1. Since patient weight is used to calculate most dosing (either
as weight-based dosing, body surface area calculation, or
other age-appropriate dose determination), all pediatric patients
should be weighed in kilograms at the time of admission
(including outpatient and ambulatory clinics) or within four
hours of admission in an emergency situation. Kilograms should
be the standard nomenclature for weight on prescriptions,
medical records and staff communications.
2. No high risk drug should be dispensed or administered if the
pediatric patient has not been weighed, unless it is an
emergency.
3. On inpatient medication orders and outpatient prescriptions,
require prescribers to include the calculated dose and the
dosing determination, such as the dose per weight (e.g.,
milligrams per kilogram) or body surface area, to facilitate an
independent double-check of the calculation by a pharmacist,
nurse or both. (7) Exceptions to this are medications that do
not lend themselves to weight-based dosing, such as topicals,
ophthalmics, and vitamins.
4. Whenever possible, use commercially available pediatric-
specific formulations and concentrations. When this is not
possible, prepare and dispense all pediatric medications in
patient-specific “unit dose” or “unit of use” containers, rather
than in commercially available adult unit doses. (7) For oral
liquid preparation medications, use oral syringes to ensure
correct dosage.
5. Clearly differentiate from adult formulations all products that

have been repackaged for use in pediatric populations. (14)
Use clear, highly visible warning labels. To prevent overdoses,
keep concentrated adult medications away from pediatric
care units. Avoid storing adult and pediatric concentrations in
the same automated dispensing machine/cabinet drawer.
6. Ensure comprehensive specialty training for all practitioners
involved in the care of infants and children, as well as
Commission
continuing education programs on pediatric medications for all
health care providers. Training and education should include
information on how adverse effects should be reported. (6), (15)
7. Communicate verbally and in writing information about the
child’s medication to the child, caregivers and
parents/guardians, including information about potential side
effects. Ask the caregiver/parent/guardian to repeat back
their understanding of the drug and how it is to be administered.
Encourage the asking of questions about medications.
8. Have a pharmacist with pediatric expertise available or on-
call at all times.
9. Establish and implement medication procedures that include
pediatric prescribing and administration practices.
Should a serious error or adverse event occur, the organization
should conduct a root cause analysis and develop and
implement a corrective action plan which should be monitored

to assure that it is effective. The Joint Commission also
encourages apology and transparency about the error with both
staff and the families involved.
In addition, The Joint Commission encourages pharmaceutical
manufacturers to develop pediatric-specific formulations as well
as to standardize the labeling and packaging for all types of
medications. (14) Researchers are encouraged to conduct
additional
research on interventions to reduce pediatric medication errors,
especially in emergency departments, ambulatory clinics and
home environments. (13)
In conclusion, since parents and caregivers play an extremely
important role in the health care of children, The Joint
Commission
encourages parents and caregivers to seek out information and
ask questions about their child’s medications and to repeat back
instructions to clinicians in order to ensure understanding about
the drug, dosages, timing and routes of administration. This is
done both to reassure staff that parents or caregivers have a true
understanding of the medications the child is taking and,
most importantly, to ensure that everyone involved can safely
administer medications to this most vulnerable population.
References
1 Kaushal R, et al: Medication errors and adverse drug events
in pediatric inpatients. Journal of the American Medical
Association, 2001, 285:2114-2120
2 Takata, GS, et al: Development, Testing, and Findings of a
Pediatric-Focused Trigger Tool to Identify Medication-Related
Harm in US Children’s Hospitals. Pediatrics, 2008, 121:e927-
3935. Available online:
http://www.pediatrics.org/cgi/content/full/121/4/e927 (accessed

4/8/08)
3 Committee on the Future of Emergency Healthcare in the
United States; the Institute of Medicine; Emergency Care for
Children: Growing Pains. Available for purchase online:
http://www.nap.edu/catalog/11655.html (accessed 4/4/08)
4 Hicks RW, Becker SC, Cousins DD: MEDMARX® Data
Report: a Chartbook of Medication Error Findings from the
Perioperative
Settings from 1998-2005, 2006, Rockville, MD, United States
Pharmacopeia Center for the Advancement of Patient Safety
5 Rinke ML, Shore AD, Morlock L, Hicks RW, Miller MR:
Characteristics of pediatric chemotherapy medication errors in a
national error reporting database. Cancer, May 25, 2007,
110(1):186-195
6 Committee on Drugs and Committee on Hospital Care,
American Academy of Pediatrics: Policy statement—Prevention
of
medication errors in the pediatric inpatient setting. Pediatrics,
2003, 112:431-436
7 Levine SL, Cohen MR: Preventing medication errors in
pediatric and neonatal patients. Medication Errors, 2007,
Washington
DC, American Pharmacists Association
8 Potts MJ, Phelan KW: Deficiencies in calculation and applied
mathematics skills in pediatrics among primary care interns.
Archives of Pediatrics & Adolescent Medicine, 1996, 150:748-
52
9 Hazinski MF: Reducing calculation errors in drug dosages:
the pediatric critical information sheet. Pediatric Nursing, 1986,

12:138-40
10 Cote, et al: Sedation disasters in pediatrics and concerns for
office based practice, Canadian Journal of Anesthesiology,
2002, 49:R10
11 The Joint Commission: Tubing misconnections—a persistent
and potentially deadly occurrence. Sentinel Event Alert #36,
April 3, 2006. Available online:
lert/sea_36.htm (accessed
4/4/08)
12 The Joint Commission: Using medication reconciliation to
prevent errors. Sentinel Event Alert #35, January 25, 2006.
Available online:
lert/sea_35.htm (accessed 4/4/08)
13 The Joint Commission: Preventing vincristine
administration errors. Sentinel Event Alert #34, July 14, 2005.
Available
online:
lert/sea_34.htm (accessed 4/4/08)
14 United States Pharmacopeia: Error-Avoidance
Recommendations for Medications used in Pediatric
Populations. Available
online:
www.usp.org/hqi/patientSafety/resources/pedRecommnds2003-
01-22.html (accessed 4/7/08)
15 Fortescue EB, et al: Prioritizing strategies for preventing
medication errors and adverse drug events in pediatric
inpatients.

Pediatrics, 2003, 111:722-729
Other resources
Hardmeier B, et al: Adverse drug events caused by medication
errors in medical inpatients. Swiss Medical Weekly, 2004,
134:664-670
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http://www.nap.edu/catalog/11655.html
lert/sea_36.htm
lert/sea_35.htm
lert/sea_34.htm
http://www.usp.org/hqi/patientSafety/resources/pedRecommnds
2003-01-22.html
Commission
Bates DW, et al: Incidence of adverse drug events and potential
adverse drug events, Implications for prevention, ADE
Prevention Study Group. Journal of the American Medical
Association, 1995, 274:29-34
Nebeker JR, et al: High rates of adverse drug events in a highly
computerized hospital. Archives of Internal Medicine, 2005,
165:1111-1116
Cordero L, et al: Impact of computerized physician order entry

on clinical practice in a newborn intensive care unit. Journal of
Perinatology, 2004, 24:88-93
Lehmann CU, et al: Preventing provider errors: Online total
parenteral nutrition calculator. Pediatrics, 2004, 113:748-753
Kozer E, et al: Variables associated with medication errors in
pediatric emergency medicine. Pediatrics, 2002, 110:737-742
Larsen GY, et al: Standard drug concentrations and smart-pump
technology reduce continuous-medication-infusion errors in
pediatric patients. Pediatrics, 2005, 116:21-25
Losek JD: Acetaminophen dose accuracy and pediatric
emergency care. Pediatric Emergency Care, 2004, 20:285-28
Potts AL, et al: Computerized physician order entry and
medication errors in a pediatric critical care unit. Pediatrics,
2004,
113:59-63
McPhillips HA, et al: Potential medication dosing errors in
outpatient pediatrics. Journal of Pediatrics, 2005, 147:761-767
Fontan JE, et al: Medication errors in hospitals: Computerized
unit dose drug dispensing systems versus ward stock
distribution
system. Pharmacy World and Science, 2003, 25:112-117
Cable G, Croft J: Agreement between pediatric medication
orders and medication cardex. Journal for Healthcare Quality,
2004,
26:14-19
Holdsworth MT, et al: Incidence and impact of adverse drug
events in pediatric inpatients. Archives of Pediatrics &

Adolescent
Medicine, 2003, 157:60-65
Pichon R, et al: Analysis and quantification of prescribing and
transcription errors in a pediatric oncology service. Pharmacy
World & Science, 2002, 24:12-15
Lesar TS: Tenfold medication dose prescribing errors. The
Annals of Pharmacotherapy, 2002, 36:1833-1839
Romano MJ, Dinh A: A 1,000-fold overdose of clonidine
caused by a compounding error in a 5-year-old child with
attention-
deficit/hyperactivity disorder. Pediatrics, 2001, 108(2):471-472
Suresh G, et al: Voluntary anonymous reporting of medical
errors for neonatal intensive care. Pediatrics, 2004, 113:1609-
1618
Taylor JA, et al: Use of incident reports by physicians and
nurses to document medical errors in pediatric patients.
Pediatrics,
2004, 114:729-735
Aspden P, et al: Preventing Medication Errors. Institute of
Medicine of the National Academies, 2006
National Coordinating Council for Medication Error Reporting
and Prevention: Recommendations to Enhance Accuracy of
Dispensing Medications. Available online:
http://www.nccmerp.org/council/council1999-03-19.html
(accessed 4/4/08)
Cote, et al: Guidelines for Monitoring and Management of
Pediatric Patients During and After Sedation for Diagnostic and
Therapeutic Procedures: An Update. Pediatrics, December

2006, 118(6)
Strang S: Creating a culture to prevent medical errors.
Children’s Hospitals Today, National Association of Children’s
Hospitals
and Related Institutions, Summer 2004. Available online:
(accessed 4/4/08)
American Society of Health-System Pharmacists: Guidelines on
Preventing Medication Errors with Antineoplastic Agents.
American Journal of Health-System Pharmacy, 2002, 59:1648-
68
Goldmann D, Kaushal R: Time to Tackle the Tough Issues in
Patient Safety. Pediatrics, October 2002, 110(4):823-826
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NTID=14171jointcommission.orgIssue 39: Preventing pediatric
medication errors | Joint Commission
In the perfectly competitive market, a firm’s marginal revenue

(MR) is equal to:
its total cost
its marginal profit
the market price
its total revenue
The demand curve facing the firm in _________ is the same as
the whole market demand curve.
perfect competition
monopolistic competition
oligopoly
monopoly
Individual cartel producers may find it advantageous to cheat on
the agreements by increasing production,
if the other producers obey the agreements.
if every member cheats.

when the punishment on cheating is severe.
when the market demand is inelastic.
The profit-maximizing monopolist facing a negative-sloping
demand curve will always produce
at an output greater than the output where average total costs
are minimized.
at an output short of that output where average total costs are
minimized.
at an output equal to industry output under perfect competition.
at an output short of that output where the profits are
maximized.
The Lerner index, (P-MC)/P, might be an inappropriate measure
for market power among firms in IT industry because
there are too many firms in the industry.
most firms charge a high price for their products.
all firms’ marginal costs are very low.
no firm has market power

In the long-run, a firm in a monopolistically competitive
industry will
earn a positive economic profit
tend to just cover its total cost, maintaining a normal profit
charge a price equal to its marginal cost
become a monopoly
An average variable cost function is estimated as
AVC
= 96− 2Q + 0.05Q2
When Q=100, the average variable cost is _________.
rising
falling
unknown.
greater than $400
In the short-run for a perfectly competitive market, a
manufacturer will stop production when:
the total revenue is less than total costs

the contribution cannot cover any fixed costs
the price is greater than AVC
operating at a negative economic profit
Refer to the following table showing the total cost schedule for
a perfectly competitive firm:
Q
TC ($)
0
20
1
45
2
65
3
100
4
145
5
195
If market price is $40, how many units of output will the
firm produce for profit-maximization?
2 units of output
3 units of output

4 units of output.
5 units of output.
2.5 points
Q
TC ($)
0
20
1
45
2
65
3
100
4
145
5
195
If market price is $40, what is the maximum profit the firm can
earn?
$15
$20
$25

$30
Q
TC ($)
0
20
1
45
2
65
3
100
4
145
5
195
If market price is $20, how many units of output will the firm
produce?
0, the firm shuts down.
1
2
3

Q
TC ($)
0
20
1
45
2
65
3
100
4
145
5
195
If the firm shouts down, its short-run loss will be
$65.
$45.
$20.
unavailable because of insufficient information
A firm is using 20 units of capital and 100 units of labor to
produce 1,000 units of output. Capital costs $150 per unit and
labor $20 per unit. The last unit of capital added 50 units of
output, while the last unit of labor added 10 units of output. The
firm

is using the cost−minimizing combination of capital and labor.
should use more of both inputs in equal proportions.
should use less of labor and more of capital for cost
minimization.
could produce the same level of output at a lower cost by using
more labor and less capital.
In the short-run cost analysis, if a firm’s marginal cost (MC) is
unavailable, the best alternative of MC is its
average total cost (ATC)
average fixed cost (AFC)
total variable cost (TVC)
average variable cost (AVC)
The Prisoner’s Dilemma 2X2 game can be used to explain why
oligopolists
tend easily to achieve collusion in games.
choose the best strategy to benefit the whole industry.

are suspicious that other players may double cross them.
can rely on cooperative behavior by all parties.
A monopoly’s _______ changes with the shift of demand curve,
when all the other factors remain.
total cost (TC) curve
marginal cost (MC) curve
average cost (AC) curve
marginal revenue (MR) curve
Which of the flowing is the most complicated market structure
because no single model can explain the firms’ behavior
thoroughly?
Oligopoly
Monopolistic competition
Perfect competition
Monopoly
Which of the following is the best definition of fixed costs?

The costs associated with capital input.
The long-run total costs paid by an operating firm.
The short-run costs paid for labor input.
The short-run total costs paid by a shutting-down firm
Which of the following profit-maximizing equilibrium condition
is correct for a monopoly with positive profit?
P = ATC = MR = MC
P > ATC > MR > MC
P > ATC > MR = MC
P = ATC > MR > MC
Which of the following is NOT a market characteristic for
monopoly?
One firm is the only supplier of a product.
Entry into the market is blocked.
The firm can influence market price though output decision-
making.

The firm’s product has few close substitutes.
When we use the Lerner index to define the market power for
two firms which are all price searchers, one firm charging at a
price in which the demand is more elastic compared with
another firm’s implies that the firm has
no market power.
less market power .
greater market power.
the same market power as the another.
The following table shows the demand schedule for round-trip
flights between Houston and Tokyo for business travelers:
Demand Schedule of Business Travelers
Price
QD
$2,000
500
$1,500
1,000
$1,000
1,500
$500
2,000
Suppose an airline’ marginal cost per seat for the round-trip

fight is $500. For profit-maximization, the airline should charge
$_____ per round-trip (Hint: Apply the “half-way rule” of MR
in graph).
500
1,000
1,500
2,000
Which of the following about “price leadership” in oligopoly is
INCORRECT?
Price leader is generally the firm with the largest market share
or the lowest average costs.
Price followers set up the same price as the leader does.
It is one kind of cooperative behavior in oligopoly.
It requires explicit agreements among firms.
Under the Lerner Index of market power definition, an existing
perfectly competitive firm
has zero market power because its marginal cost equal the
market price.

has a positive market power because it makes a positive profit.
has the same market power as a monopoly.
Which of the following is INCORRECT in the MS Excel
operation for constructing a short-run production function with
labor input (L)?
The regression model should be a cubic function such as Q =
AL3+BL2.
The independent variables should be L3, L2 and L.
We need to choose “Constant as zero” in regression operation.
Which of the following is most likely to be qualified as a
perfectly competitive market?
Airline industry
Stock market
Gas station
Power utility industry
None of the above

is not qualified to apply the Lerner index
What is the most special market characteristic of oligopoly
different from the other market structures?
firms have market power
product differentiation
barriers to entry
interdependence of decision making
Suppose that Nike and Adidas are the only sellers of athletic
footwear in the United States. They are deciding how much to
charge for similar shoes. The two choices are “Low” and
“High”. The payoff (profit as million) 2X2 matrix is as follows:
Does Nike have the dominant strategy in the game? _____. Does
Adidas have the dominant strategy in the game? _____.
Yes; Yes

No; Yes
No; No
Yes; No
A production function using K (capital) and L (labor) inputs,
Q=2K+3L, exhibits
increasing return to scale.
decreasing return to scale.
constant return to scale.
economies of scale
When we construct the cubic total variable cost, TVC = aQ +
bQ2
+ cQ3, in order to confirm the theoretical properties, the
parameters must satisfy
a > 0, b > 0, and c < 0.
a < 0, b > 0, and c < 0.
a > 0, b < 0, and c > 0.

a < 0, b < 0, and c > 0.
The U-shaped marginal cost and average cost curves come from
the law of diminishing marginal utility.
the law of diminishing return (marginal product).
the law of demand
the fixed cost
A cubic specification for a short-run total cost (TC) function is
appropriate when the scatter diagram indicates
a U-shaped total cost (TC) curve.
a S-shaped average variable cost (AVC) curve.
a L-shaped marginal cost (MC) curve.
a U-shaped marginal cost (MC) curve.
A firm can choose the optimal usage of input to maximize the
profit by employing the amount of input where
the input price equals the marginal revenue product (MRP).

the input price equals the marginal revenue (MR).
the input price equals the marginal cost (MC).
the input price equals the average total cost (ATC).
When a manager of manufacturing factory said, “I will achieve
the maximum amount of output given the current combination
of inputs,” then the manager is trying to achieve
economic efficiency.
technical efficiency.
cost minimization.
production minimization.
Economies of “scope” means that
the average cost declines when output increases.
the joint cost of producing two goods is less than the sum of the
separate costs of producing the two goods.
economies of scale also exhibits.

two goods can be produced more efficiently if their production
processes are separate.
If a firm can influence the market price by changing its
quantity of output, then the firm
must be a monopoly
has market power
will set the price equal to its average total costs
earns a normal profit in both short-run and long-run
A firm will shutdown in the short-run if
it makes a negative profit.
the market price is lower than its average total cost (ATC).
the market price is lower than its average variable cost (AVC).
the fixed cost can be only covered partially
When participants in a game choose to take actions that
represent Nash equilibrium,
no single participant has an incentive to change its action.

each participant has chosen the best action possible, given what
the others have chosen.
no other set of actions could make all participants better off.
both a and b
United States Postal Service (USPS) is a monopoly in the _____
market because it _______.
parcel delivery; exhibits economies of scale in production
ordinary mail delivery; charges a lower price than competitors
ordinary mail delivery; is granted by the public franchise to
open every house’s mailbox
parcel delivery; charges a lower price than competitors
Assume that a monopoly faces the inverse market demand as P
= 100 – 2Q and the monopoly’s marginal cost function is MC =
40–Q. The monopoly’s optimal output should be
20
30
40

60
Refer to the following table with demand and cost schedule for
a monopoly:
Price ($)
Q
TC ($)
20
4
75
19
5
88
18
6
103
17
7
120
16
8
139
15
9
159
For profit maximization, what price should the monopoly
charge?
$19
$18

$17
$16
Refer to the following table with demand and cost schedule for
a monopoly:
Price ($)
Q
TC ($)
20
4
75
19
5
88
18
6
103
17
7
120
16
8
139
15
9
159
The marginal revenue (MR) for the 9th unit of output (Q)
is
$10

Issue 39 Preventing pediatric medication errors Joint Commi.docx

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