. Santerre and Bennett (1992) estimated the STVC function for a sample of 55 for-profit hospitals in

. Santerre and Bennett (1992) estimated the STVC function for a sample of 55 for-profit hospitals in Texas (t-statistics are in parentheses below the estimated coefficients). ln STVC Â¼ 1.31 Ã¾ 0.47ln q Ã¾ 0.80ln wÃ¾ 0.73ln QUALITY Ã¾ 0.11ln CASEMIX (0.69) (3.31) (4.42) (2.58) (1.48) Ã¾ 0.29ln k Ã¾ 0.07ln DOC Ã¾ Other factors (3.16) (0.88) Adj. R2 Â¼ 0.95 N Â¼ 55 Where STVC Â¼ short-run total variable cost, q Â¼ a measure of output (total inpatient days), w Â¼ average wage rate or price of labor, QUALITY Â¼ a measure of quality (number of accreditations), CASEMIX Â¼ an indicator of patient case-mix (number of services), k Â¼ a measure of capital (beds), and DOC Â¼ number of admitting physicians. All variables are expressed as natural logarithms (ln), so the estimated coefficients can be interpreted as elasticityâ€™s.A. How much of the variation in STVC is explained by the explanatory variables? How do you know that?B. Which of the estimated coefficients are not statistically significant? Explain.C. Does the estimated coefficient on output represent short-run economies or diseconomies of scale? Explain.D. What are the expected signs of the coefficient estimates on w, QUALITY, and CASEMIX? Explain.E. Provide an economic interpretation of the magnitude of the estimated coefficient on w.F. What do the estimated coefficients on k and DOC suggest about the amount of capital and physicians at the representative hospital?