Explain how the listed events (a-d) would affect the following at Hilton Hotels

i. Marginal cost
ii. Average variable cost
iii. Average fixed cost
iv. Average total cost

a. Hilton decides on an across-the-board 5 percent increase in executive salaries.
b. Hilton decides to eliminate all print advertising.
c. Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers.
d. The federal government starts to levy a $5 room tax on all hotel rooms.


a. Average fixed cost and average total cost will increase; marginal cost and average variable cost will be unaffected.
c. Average fixed cost and average total cost will decrease; marginal cost and average variable cost will be unaffected.
c. Marginal cost, average variable cost and average total cost will increase; average fixed cost will be unaffected.
d. Marginal cost, average variable cost and average total cost will increase; average fixed cost will be unaffected.

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