Author Question: The Hound Dog Bus Company contemplates expanding its New Mexico operations by offering service from ... (Read 39 times)

arivle123 · **on:** Jun 30, 2018

The Hound Dog Bus Company contemplates expanding its New Mexico operations by offering service from Raton to Milk-of-Magnesia. The total cost of the trip would be 400, of which 150 is fixed cost, which it has already paid. The firm expects to earn 275 in revenue from the trip. The Hound Dog Bus Co should
a. offer this service because it will earn a positive economic profit
b. not offer this service because the marginal revenue is less than the marginal cost
c. offer this service because the revenue exceeds fixed cost
d. not offer this service because the total cost exceeds the total revenue
e. offer this service because the added revenue exceeds the added cost of this service

Question 2

For a monopolist, if marginal revenue is 40, total revenue is
a. increasing
b. decreasing
c. zero
d. positive
e. negative