Three college students are considering operating a tutoring business in economics. This business would require that they give up their current jobs at the student recreation center, which pay \($6,000\) per year. A fully equipped facility can be leased at a cost of \($8,000\) per year. Additional costs are \($1,000\) a year for insurance and \($.50\) per person per hour for materials and supplies. Their services would be priced at \($10\) per hour per person.

a. What are fixed costs?

b. What are variable costs?

c. What is the marginal cost?

d. How many students would it take to break even?