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 will be its daily economic profit?
A. $26
B. $36
C. $27
D. $33
Answer: C
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a. True b. False Indicate whether the statement is true or false
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Indicate whether the statement is true or false
An import tariff will have what effect on price and quanititly in the domestic market for the good?
a. increase; increase b increase; decrease c. decrease; increase d. decrease; decrease e. decrease; no change