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pls help on b 2.6 Suppose Greenland Bikes, a profit-maximizing firm, is the only car rental company in a small resort town. The marginal cost
pls help on b
2.6 Suppose Greenland Bikes, a profit-maximizing firm, is the only car rental company in a small resort town. The marginal cost to Greenland Bikes of renting out a bike is $3, and Greenland Bikes has no fixed costs. Each day Greenland Bikes has seven potential customers, whose reservation prices are listed in the following table. Customer Reservation Price (S/Rental) A 22 B 16 C 12 D 10 E 8 F 6 G 4 a. What is the socially optimal number of bikes for Greenland Bikes to rent out each day? (2 points) I each da b. Suppose Greenland Bikes charges a single price to all of its customers. How many bikes will it rent out each day? What price will it charge? (4 points) c. If Greenland Bikes charges a single price to all of its customer, what will be its daily economic profit? (2 points) d. Suppose Greenland Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. Suppose Greenland Bikes can charge a different price in the morning and in the afternoon. Then how many bike(s) will it rent out in the morning, and how much will it charge for each bike? How many bike(s) will it rent out in the afternoon, and how much will it charge for each bike? What will be Greenland Bikes' daily economic profit? (6 points) 2.6 Suppose Greenland Bikes, a profit-maximizing firm, is the only car rental company in a small resort town. The marginal cost to Greenland Bikes of renting out a bike is $3, and Greenland Bikes has no fixed costs. Each day Greenland Bikes has seven potential customers, whose reservation prices are listed in the following table. Customer Reservation Price (S/Rental) A 22 B 16 C 12 D 10 E 8 F 6 G 4 a. What is the socially optimal number of bikes for Greenland Bikes to rent out each day? (2 points) I each da b. Suppose Greenland Bikes charges a single price to all of its customers. How many bikes will it rent out each day? What price will it charge? (4 points) c. If Greenland Bikes charges a single price to all of its customer, what will be its daily economic profit? (2 points) d. Suppose Greenland Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. Suppose Greenland Bikes can charge a different price in the morning and in the afternoon. Then how many bike(s) will it rent out in the morning, and how much will it charge for each bike? How many bike(s) will it rent out in the afternoon, and how much will it charge for each bike? What will be Greenland Bikes' daily economic profit? (6 points) Step by Step Solution
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