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

question 11

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.  
$$\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservetion Price } \\\text { (\$ /Rental) }\end{array} \\\hline \mathrm { A } & 22 \\\hline \mathrm { B } & 16 \\\hline \mathrm { C } & 12 \\\hline \mathrm { D } & \mathrm { 8 } \\\hline \mathrm { E } & 6 \\\hline \mathrm { F } & 4 \\\hline\end{array}$$ If Island Bikes charges a single price to all of its customers, then what price will it charge?

• A)$4
• B)$8
• C)$12
• D)$16

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Definitions:

Descended

The term refers to something that has originated or been derived from an ancestor or source.

Billion Years

A period of time equaling one thousand million (1,000,000,000) years, often used in the context of the age of the Earth and universe.

Sexual Selection

Mode of natural selection in which some individuals outreproduce others of a population because they are better at securing mates.