Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $30 and a customer is willing to pay $60 for the night, the hotel manager should
a. rent the room because the marginal benefit exceeds the marginal cost.
b. rent the room because the marginal benefit exceeds the average cost.
c. not rent the room because the marginal benefit is less than the marginal cost.
d. not rent the room because the marginal benefit is less than the average cost.
a
You might also like to view...
Most of the bank failures in the 1980s and 1990s occurred
a. in states that were rural and in states where the oil industry was important b. in states where there was a large level of new investment in commercial property c. in states with large urban populations such as New York, Michigan, and Pennsylvania d. because of mismanagement, having little to do with the state of the economy e. in states where the population was growing very slowly or actually declining
Peter Piper picks a peck of pickled peppers using 10 units of labor and two pepper-picking machines. The last worker hired picked 100 peppers, and the last machine added 1,000 peppers. If labor can be hired at $5 a pepper picker and machines cost $5,000 . what advice do you have for Peter Piper?