QUESTION 1

1. Suppose the cost of operating a 100-room hotel for a night is $7,500 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $50, the hotel manager should rent one of the empty rooms only if a customer is willing to pay
2. more than $75, as the average benefit will exceed the marginal cost.
3. more than $75, as the marginal benefit will exceed the marginal cost.
4. more than $50, as the average benefit will exceed the marginal cost.
5. more than $50, as the marginal benefit will exceed the marginal cost.