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For a driver in a local market in which the price offered for a one-mile Uber...

For a driver in a local market in which the price offered for a one-mile Uber ride is $1.00, if marginal cost is $1.50 per mile should the driver provide the ride? Explain.

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Answer #1

No, as the cost for the mile travelled in the Uber is more than the revenue that the driver will get, they will be at a loss if they travelled, so, they should not offer the ride at that cost. If the price of the ride is above 1.50 per kilometer and the revenue of the ride is above the marginal cost.

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