Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 If Island Bikes charges a single price to all of its customers, then how many bikes will it rent out each day?
A. 5
B. 4
C. 3
D. 6
Answer: C
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Suppose Jill has earned more income this year as compared to what she did last year. Her income tax has also increased. Does it necessarily mean that the income tax system is progressive? Explain
What will be an ideal response?
Refer to the above figure. Economic profits for this firm are
A. negative. B. zero. C. positive. D. undetermined without more information.
Factors of production are the
A) goods and services produced by the economy. B) productive resources used to produce goods and services. C) goods that are bought by individuals and used to provide personal enjoyment. D) goods that are bought by businesses to produce productive resources. E) productive resources used by government to increase the productivity of consumption.
Using the Figure 13.3 above explain why this firm could not possibly represent a monopolist. What type of firm is represented by this graph and why?
What will be an ideal response?