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 What is the socially optimal number of bikes for Island Bikes to rent out each day?
A. 4
B. 3
C. 5
D. 6
Answer: D
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An increase in the reserve requirement will lead to increased net exports
Indicate whether the statement is true or false
According to your text, when people talk about "the economy", they probably have in mind
A) the stock market. B) commercial society in general. C) the marriage market. D) black markets.
Holding large amounts of bank capital helps prevent bank failures because
A) it means that the bank has a higher income. B) it makes loans easier to sell. C) it can be used to absorb the losses resulting from bad loans. D) it makes it easier to call in loans.
By focusing the customers on the price of a product, you
a. Increase your chances of engaging in a price war with your competitors b. Make the customers more price sensitive to the product c. Make the demand for the product more elastic d. All of the above