The Accompanying Table Summarizes Six Potential Customers' Willingness to Pay

question 122

Multiple Choice

The accompanying table summarizes six potential customers' willingness to pay for a solo skydiving experience from SkyMasters, Inc. The aircraft has room for eight people, including the pilot and skydiving instructor. The marginal cost of adding each additional passenger is $100. Use this information to answer the questions. $\begin{array}{ll}\text { Customer }&\text { Maximum Wilingness to Pay }\\\text { Harold } & \$ 400 \\\text { Leslie } & \$ 350 \\\text { Jay } & \$ 300 \\\text { Kisten } & \$ 250 \\\text { Ivana } & \$ 200 \\\text { Matt } & \$ 150\end{array}$
-Assume that SkyMasters, Inc. follows the profit-maximizing rule and that the company charges a single price for skydiving. Which potential customer(s) will not purchase a skydiving experience?

• A) Harold and Leslie
• B) Kristen and Jay
• C) Matt and Ivana
• D) Harold
• E) Matt

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Definitions:

Average Sale Period

The average sale period measures the average amount of time it takes for a business to convert its inventory into sales.

Cost of Goods Sold

The total cost of manufacturing and delivering a product to customers, typically including material, labor, and overhead expenses.

Inventory

Materials and goods a business holds for the purpose of resale or as input in its production process.

Debt-to-Equity Ratio

A measure of a company's financial leverage, determined by dividing its total liabilities by stockholders' equity.