The figure below shows cost and revenue functions for a bike rental company when it operates q bikes. Should the company add a 40th bike? How about a 95th bike? Explain using marginal revenue and marginal cost. $ C(q) 5000

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter7: Analytic Trigonometry
Section7.6: The Inverse Trigonometric Functions
Problem 94E
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The figure below shows cost and revenue functions for a bike rental company when it operates q bikes. Should the company add a 40th
bike? How about a 95th bike? Explain using marginal revenue and marginal cost.
$
C(q)
At q = 40 marginal revenue is less
At q = 95 marginal revenue is
A
5000
4000
3000
2000
1000
0
q
25 50 75 100 125
than marginal cost, so the 40th bike
R(q)
than marginal cost, so the 95th bike
be added.
be added.
Transcribed Image Text:The figure below shows cost and revenue functions for a bike rental company when it operates q bikes. Should the company add a 40th bike? How about a 95th bike? Explain using marginal revenue and marginal cost. $ C(q) At q = 40 marginal revenue is less At q = 95 marginal revenue is A 5000 4000 3000 2000 1000 0 q 25 50 75 100 125 than marginal cost, so the 40th bike R(q) than marginal cost, so the 95th bike be added. be added.
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