Suppose Island Bikes, a Profit-Maximizing Firm, Is the Only Bike

question 86

Multiple Choice

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 in the table.  
$$\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservetion Price } \\\text { (\$ /Rental) }\end{array} \\\hline \mathrm { A } & 22 \\\hline \mathrm { B } & 16 \\\hline \mathrm { C } & 12 \\\hline \mathrm { D } & \mathrm { 8 } \\\hline \mathrm { E } & 6 \\\hline \mathrm { F } & 4 \\\hline\end{array}$$ Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be its daily economic profit?

• A)$27
• B)$32
• C)$33
• D)$39

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Definitions:

Lower-Consensus Deviance

Behaviors that are not widely agreed upon as deviant by society, often involving acts that may be frowned upon by some but not considered criminal or immoral by others.

Public Consensus

General agreement or shared beliefs among a population or group on a specific issue or idea.

Constructionist Perspective

A theoretical viewpoint holding that social phenomena and categories are not natural but instead constructed through social processes, including the roles of power and social institutions.

Constructionists

Advocates of an approach or belief that concepts or identities are socially constructed rather than inherently fixed.