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 what price will it charge?
A. $4
B. $12
C. $8
D. $16
Answer: B
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A. Helicopter B. Gasoline C. Barbie dolls D. Breakfast cereal
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