Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has sixpotential customers, whose reservations prices are listed in the table.ReservationPriceCustomer ($/Rental)ABCDDEFOTSuppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in themorning and in the afternoon, then what will be its dally economic profit?OMultiple ChoiceO$27$32221612ē8$336A4$39

Industrial economics is the study and appraisal of business financial issues utilizing abstract…

Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. Reservation Price Customer ($/Rental) B C C D E F O OO $27 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be its daily economic profit? Multiple Choice $32 22 16 17 12 $33 7 8 $39 7 6 7 4

Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. Reservation Price Customer ($/Rental) B C C D E F O OO $27 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be its daily economic profit? Multiple Choice $32 22 16 17 12 $33 7 8 $39 7 6 7 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six
potential customers, whose reservations prices are listed in the table.
Reservation
Price
Customer ($/Rental)
A
B
C
D
D
E
F
O
T
Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the
morning and in the afternoon, then what will be its dally economic profit?
O
Multiple Choice
O
$27
$32
22
16
12
ē
8
$33
6
A
4
$39

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