Question
The Route 66 Truck Stop, Inc., sells gasoline to both self-service and full-service customers.Those who pump their own gas benefit from the lower self-service price
The Route 66 Truck Stop, Inc., sells gasoline to both self-service and full-service customers.Those who pump their own gas benefit from the lower self-service price of $1.80 per gallon.Full-service customers enjoy the service of an attendant, but they pay a higher price of $1.90 per gallon.The company has observed the following relation between the number of attendants employed per day and full-service output:
Route 66 Truck Stop, Inc.
Number of Attendants per Day Full-Service Output (gallons)
0 0
1 2,000
2 3,800
3 5,400
4 6,800
5 8,000
(Important to explain the result)
a.Construct a table showing the net marginal revenue product derived from attendant employment.
b.How many attendants would Route 66 employ at a daily wage rate of $160 (including wages and benefits)?
c.What is the highest daily wage rate Route 66 would pay to hire four (4) attendants per day?
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