Question

4-2 Game Day Shuttle ServiceYou run a game day shuttle service for parkingservices for the local ball club. Your costs for dif-ferent customer loads are 1: $30, 2: $32, 3: $35,4: $38, 5: $42, 6: $48, 7: $57, and 8: $68. Whatare your marginal costs for each customer loadlevel? If you are compensated $10 per ride,what customer load would you want?

Answer 1

Answer:

Please find table for TR, MR, TC and MC

Customer	Price = MR	Total Revenue	Total Cost	MC
1	10	10	30
2	10	20	32	2
3	10	30	35	3
4	10	40	38	3
5	10	50	42	4
6	10	60	48	6
7	10	70	57	9
8	10	80	68	11

At customer load 7 MR > MC and after 8th customer MR < MC.

Thus 7 customer load will maximize the profit

7 customer load will be preferred