A hotel pays the phone company $100 per month plus $.25 for each call made. During January 6,000 calls were made. In February 5,000 calls were made.

Required:

1. Calculate the hotel’s phone bills for January and February.

2. Calculate the cost per phone call in January and in February.

3. Separate the January phone bill into its fixed and variable components.

4. What is the marginal Cost of one additional phone call in January?

5. What was the average cost of a phone call in January?