wo manufacturing firms, located in cities 90 miles apart, both send their trucks four times a week to the other city full of cargo and return empty. Each driver costs $275 per day with benefits (the round trip takes all day) and each firm has truck operating costs of $1.20 a mile. (a)How much could each firm save weekly if each sent its truck twice a week and hauled the other firm’s cargo on the return trip? (b)What would the savings be if there was a $0.20 per mile emissions tax on all business truck travel?
wo manufacturing firms, located in cities 90 miles apart, both send their trucks four times a week to the other city full of cargo and return empty. Each driver costs $275 per day with benefits (the round trip takes all day) and each firm has truck operating costs of $1.20 a mile. (a)How much could each firm save weekly if each sent its truck twice a week and hauled the other firm’s cargo on the return trip? (b)What would the savings be if there was a $0.20 per mile emissions tax on all business truck travel?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Two manufacturing firms, located in cities 90 miles apart, both send their trucks four times a week to the other city full of cargo and return empty. Each driver costs $275 per day with benefits (the round trip takes all day) and each firm has truck operating costs of $1.20 a mile.
(a)How much could each firm save weekly if each sent its truck twice a week and hauled the other firm’s cargo on the return trip?
(b)What would the savings be if there was a $0.20 per mile emissions tax on all business truck travel?
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