Federal Rent-A-Car Is Putting Together a New Fleet

question 43

Multiple Choice

Federal Rent-a-Car is putting together a new fleet. It is considering package offers from three car manufacturers. Fred Motors is offering 5 small cars, 5 medium cars, and 10 large cars for $500,000. Admiral Motors is offering 5 small, 10 medium, and 5 large cars for $400,000. Chrysalis is offering 10 small, 5 medium, and 5 large cars for $300,000. Federal would like to buy at least 600 small cars, at least 500 medium cars, and at least 600 large cars. How many packages should it buy from each car maker to keep the total cost as small as possible What will be the total cost ?

• A)15 packages of Fred Motors, 35 packages of Admiral Motors, and 15 packages of Chrysalis, the total cost is $26,000,000
• B) 35 packages of Fred Motors, 15 packages of Admiral Motors, and 35 packages of Chrysalis, the total cost is $34,000,000
• C) 35 packages of Fred Motors, 35 packages of Admiral Motors, and 15 packages of Chrysalis, the total cost is $36,000,000
• D) 15 packages of Fred Motors, 35 packages of Admiral Motors, and 35 packages of Chrysalis, the total cost is $32,000,000
• E) 15 packages of Fred Motors, 15 packages of Admiral Motors, and 35 packages of Chrysalis, the total cost is $24,000,000

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Definitions:

Rule Of Reason

A doctrine used in antitrust law to determine if a business practice is reasonable and therefore legal, focusing on its effect on competition.

Per Se Rule

A legal doctrine declaring that certain actions are inherently illegal and do not require detailed proof of harm or anti-competitive effect to establish their illegality.

Monopoly Power

Monopoly power refers to the ability of a single company or entity to control a significant portion of the market for a particular good or service, limiting competition and potentially influencing prices or terms of sale.

Market Shares

Market Shares represent the percentage of an industry's total sales that is earned by a particular company over a specified time frame.