Question

Question 15 (1 point) The company from which Karen is renting decides to try a new pricing stratesy whereby the additional cost falls as more tents are rented. The following chart dectails Karen's total willingness to pay and the dial cost of renting tents under the company's new pricing guidelines: Total Number of Tents Total Benefit Total Cost $1,800 $3,300 $4,500 $5,400 $ 6,000 $ 6,400 1,600 $3,000 $4,100 $4,900 $ 5,600 $6,100 How many tents will Karen ret under the new pricing stratcgE MacBook Air 20 p 2 3 4 5 6

Answer 1

Answer

It will rent that number at which total profit maximizes. We can write Total Profit = Total Benefit - Total Cost.

We can see from above table that Total Profit maximizes when It will rent 4 tents.

Profit = Total benefit - Total rent = 5400 - 4900 = 500

Hence He will rent 4 tents.