Use the Information Below to Answer the Following Question(s)

question 265

Multiple Choice

Use the information below to answer the following question(s) .
Express Bus Company operates a bus route that takes passengers from Cleveland to Chicago every day. Assume the bus tickets sell for $50 per rider; the bus line's variable costs are $35 per rider; and its fixed costs are $75,000 each month.
-What is the contribution margin per rider at Express Bus Company?

• A) $15.00
• B) $0.30
• C) $35.00
• D) $3.33

Identify cases where government intervention in monopolies raises or lowers social welfare.

Analyze the rationale behind public ownership of monopolies and its effects on market efficiency and social welfare.

Understand the basic principles of a perfectly competitive market.

Analyze the relationship between marginal revenue, average revenue, and total revenue in competitive markets.

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Definitions:

Hedging

A financial strategy used to reduce or mitigate risk by taking offsetting positions in related securities or derivatives.

Futures Contract

An agreement in law whereby parties commit to buying or selling an asset, such as a financial instrument or commodity, at a set price, to be concluded on a defined future date.