Question
An individual is running a game-day shuttle service for parking services for the local ball club. Suppose they are compensated $10 per customer, per ride.
An individual is running a game-day shuttle service for parking services for the local ball club. Suppose they are compensated $10 per customer, per ride. In other words, they're marginal revenue is $10. Their costs for different customer loads are summarized in the following table.
For each customer load, calculate both the marginal cost and the average cost. Then answer the question that follows.
Note: Round the answers to the nearest cent.
Customers Total Cost $ Marginal Cost $ per customer Average Cost Per Customer $
1 $30 $ $
2 $32 $ $
3 $36 $ $
4 $42 $ $
5 $50 $ $
6 $60 $ $
7 $72 $ $
8 $86 $
In order to maximize profits, the individual should carry customers per load?
A. 7
B. 8
C. 3
D. 6
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