Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6.Delta Rail is considering adding an additional run on its Hope to Princeton commuter route. The total cost of the additional trip is estimated to

6.Delta Rail is considering adding an additional run on its Hope to Princeton commuter route. The total cost of the additional trip is estimated to be $3,000 of which $1,000 are variable costs. The anticipated extra revenues are $1,800. What should the company do?

A. Not add the train since the company will make a loss.

B. Not add the train since the company cannot cover its total fixed costs.

C. Add the train since the loss is less than its total variable costs.

D. Add the train since the marginal revenue of the extra run exceeds its marginal cost.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Mis

Authors: Kenneth Laudon

8th Edition

1292153776, 9781292153773

More Books

Students also viewed these Economics questions

Question

What are automatic transfer service (ATS) accounts?

Answered: 1 week ago

Question

Pollution

Answered: 1 week ago

Question

The fear of making a fool of oneself

Answered: 1 week ago