The Accompanying Table Summarizes Information About Each Potential Passenger's Age

question 53

Multiple Choice

The accompanying table summarizes information about each potential passenger's age and his or her maximum 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. SkyMasters, Inc. holds significant market power for its region. Use this information to answer the questions. $\begin{array}{lll}&\text { Maximum }\\\text { Customer }&\text { Willingness to Pay }&\text { Age }\\\text { Harold } & \$ 400 & 50 \\\text { Jay } & \$ 300 & 45 \\\text { Leslie } & \$ 350 & 42 \\\text { Kristen } & \$ 250 & 21 \\\text { Ivana } & \$ 200 & 20 \\\text { Matt } & \$ 150 & 18\end{array}$
-If SkyMasters, Inc. could charge two different prices based on the age of the customer, what would those prices be?

• A) $300 and $200
• B) $350 and $200
• C) $400 and $150
• D) $400 and $200
• E) $250 and $100

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Definitions:

Expenses

Costs incurred in the process of earning revenue, including operational, administrative, and sales costs.

Supplies

Items used in the operation of a business that are consumed or not durable over a long period, such as office materials or cleaning supplies.

Liability

An obligation or debt that a company owes to others, which must be settled through the transfer of assets or services.

Expense

An economic outflow or the consumption of resources resulting from the operations of a business.