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Problem 1: Using the Marginal Approach Suppose your company runs a shuttle business of a hotel to and from the local airport. The costs for different…

If you are compensated $10 per ride, what customer load would you choose?

____Marginal Cost is the change in costs due to the additional customer. Since marginal revenue is the price of $10, you will serve customers up to the point where MC > MR or you will serve 7 customers.

____Marginal Cost is the change in costs due to the additional customer. Since marginal revenue is the price of $10, you will serve customers up to the point where MC < MR or you will serve 10 customers.

____Marginal Cost is the change in costs due to the additional customer. Since marginal revenue is the price of $10, you will serve customers up to the point where MC< MR or you will serve 9 customers.

____Marginal Cost is the change in costs due to the additional customer. Since marginal revenue is the price of $10, you will serve customers up to the point where MC = MR or you will serve 7 customers.

 

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