AHIP Exam AHM-520 Topic 5 Question 90 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 90
Topic #: 5

A product is often described as having a thin margin or a wide margin. With regard to the factors that help determine the size of the margin of a health plan's product, it can correctly be stated that the

Agreater the risk a health plan assumes in a health plan, the thinner the product margin should be

Bmore that competition acts to force prices down, the wider the product margins tend to become

Cgreater the demand for the product, the thinner the margin for this product tends to become

Dlonger the premium rates are guaranteed to a group, the wider the health plan's margin should be

Show Suggested Answer

Suggested Answer: B

by Art at Jun 22, 2024, 10:54 PM

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Alecia

8 months ago

I agree with Joseph, the sunk cost would be the expense associated with installing a new switching station because it is a cost that has already been incurred and cannot be recovered.

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Gayla

9 months ago

D) Installing additional phone lines is the sunk cost. Once those lines are in place, the cost of maintaining them is a fixed expense that can't be avoided.

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Elvis

8 months ago

D) Installing additional phone lines

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Franklyn

8 months ago

C) Installing a new switching station

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Rikki

8 months ago

B) Maintaining the existing staff

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Ivory

8 months ago

A) Adding new customer service representatives

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Joseph

9 months ago

I think the sunk cost would be the expense associated with installing a new switching station.

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Nakita

9 months ago

Haha, I bet the person who wrote this question is an accountant who loves talking about sunk costs. The real sunk cost here is the time I'm spending on this exam!

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Bethanie

9 months ago

I disagree, I believe the sunk cost would be the expense associated with maintaining the existing staff.

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Ashton

9 months ago

I think the sunk cost would be the expense associated with adding new customer service representatives.

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Lemuel

9 months ago

I think the answer is B) Maintaining the existing staff. Maintaining the current staff is a necessary cost that will continue regardless of the changes made, so it's a sunk cost.

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Dalene

8 months ago

Adding new customer service representatives would be a differential cost since it is a new expense for the company.

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Valentine

8 months ago

I agree, maintaining the existing staff is a sunk cost because it will not change with the new additions.

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Ernest

9 months ago

The correct answer is C) Installing a new switching station. Once the investment has been made, the expense associated with the new switching station is a sunk cost that cannot be recovered.

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Jettie

8 months ago

That makes sense, once it's installed, it's a sunk cost.

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Jettie

9 months ago

C) Installing a new switching station

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