**Rubidoux Adventures Climb Pricing and Reservation Costs**Rubidoux Adventures supplies professional guides for climbs up Mt. Rubidoux. The company employs two guides, Rocky and Cliff. Due to the ease of the climb, the company has two customers, Ken and Lucy. Below, we explore the guides' marginal costs for each climb and the maximum willingness to pay (MWTP) for the customers. This data will aid in answering the subsequent questions, assuming only whole climbs are available.### Table: Climb Costs and Willingness to Pay| Climbs | MC Rocky ($/climb) | MC Cliff ($/climb) | MWTP Ken ($/climb) | MWTP Lucy ($/climb) ||--------|---------------------|-------------------|--------------------|---------------------|| 1 | 4 | 1 | 24 | 22 || 2 | 6 | 3 | 23 | 21 || 3 | 7 | 4 | 21 | 18 || 4 | 11 | 7 | 19 | 16 || 5 | 13 | 9 | 17 | 11 || 6 | 16 | 12 | 14 | 8 || 7 | 19 | 14 | 11 | 6 || 8 | 21 | 16 | 9 | 3 |**Key Terms:**- **MC (Marginal Cost):** The additional cost incurred by hiring an additional guide for a climb.- **MWTP (Maximum Willingness to Pay):** The highest price a customer is willing to pay for an additional climb.### Question: What is Ken's Reservation Price?- **Options:** - a. 22 - b. 23 - c. 24 - d. 21The reservation price is the highest price that Ken is willing to pay for his first climb. According to the table, Ken’s maximum willingness to pay for the first climb is **$24**. Therefore, option **c. 24** is correct.

Reservation wage is the wage that is maximum willing price for buyer and minimum acceptable price…

Rubidoux Adventures supplies professional guides for climbs up Mt. Rubidoux. The company has two guides, Rocky and Cliff. Because Mt. Rubidoux is a pretty easy climb, the company has only two customers, Ken and Lucy. The table below shows the guides' marginal costs for each climb as well as the customers' MWTP for guided climbs. Use this table to answer the questions that follow. Assume that only whole climbs are available. MCRocky MWTPKen MWTPLucy (S/climb) Climbs MCClf (S/climb) (S/climb) (S/climb) 1 4 1 24 22 6 3 23 21 3 7 4 21 18 11 7 19 16 13 17 11 6. 16 12 14 8 7 19 14 11 6 21 16 9. 3 What is Ken's reservation price? O a. 22 Ob 23 O C 24 O d. 21

Rubidoux Adventures supplies professional guides for climbs up Mt. Rubidoux. The company has two guides, Rocky and Cliff. Because Mt. Rubidoux is a pretty easy climb, the company has only two customers, Ken and Lucy. The table below shows the guides' marginal costs for each climb as well as the customers' MWTP for guided climbs. Use this table to answer the questions that follow. Assume that only whole climbs are available. MCRocky MWTPKen MWTPLucy (S/climb) Climbs MCClf (S/climb) (S/climb) (S/climb) 1 4 1 24 22 6 3 23 21 3 7 4 21 18 11 7 19 16 13 17 11 6. 16 12 14 8 7 19 14 11 6 21 16 9. 3 What is Ken's reservation price? O a. 22 Ob 23 O C 24 O d. 21

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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