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Problem 1: Using the Marginal Approach (40 points)

Suppose your company

runs the shuttle business for a hotel to and from the local airport. The costs for different customer loads are:

1. Customer: $30

2.  Customers: $32

3.  Customers: $35

4.  Customers: $38

5.  Customers: $42

6.  Customers: $48

7.  Customers: $57

8.  Customers: $68.


  1. What are your marginal costs for each customer load level?
  2. If you are compensated $10 per ride, what customer load would you choose?

Top Answer

ans 1 it is difference between successive total costs mc= - mc=32-30=2... View the full answer

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