Refer to the following figure:
The Hilton Hotel chain serves both business and vacation travelers.
and
represent the demand and marginal revenue for business travelers, while
and
are the demand and marginal revenue for vacation travelers.
-If marginal cost decreases to the point that total marginal revenue (MRT is not shown in the figure) for Hilton at the profit-maximizing level of total output is $40, what price should the Hilton charge BUSINESS travelers?
A) $60
B) $80
C) $100
D) $120
E) $140
Correct Answer:
Verified
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