Answered: n order to maximize profits, you should…

Business

Economics

n order to maximize profits, you should carry customers per load.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 2.5CE

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Question

You run a game-day shuttle service for parking services for the local ball club. Suppose you are compensated $30 per customer, per ride. In other words, your marginal revenue is $30. Your costs for different customer loads are summarized in the following table.

For each customer load, calculate both the marginal cost and the average cost. Then answer the question that follows.

Note: Round your answers to the nearest cent.

Customers	Total Cost	Marginal Cost
($)	($ per customer)	($ per customer)
1	$30

2	$36

3	$48

4	$66

5	$90

6	$120

7	$156

8	$198

In order to maximize profits, you should carry customers per load.

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