Business, 17.12.2019 06:31 pacangel

The international airport in brezuela, a vibrant city in the country of bonitas, auctions an exclusive license every year to a taxi company for the right to serve the airport's passengers. victor diego is the owner of speedy motors, the taxi company that won this year's license. currently, with average revenue at $2 per mile, speedy motors earns marginal revenue of $1 per mile. since there are no other taxis available at the airport, victor feels that they can increase profits by increasing fares. however, his daughter, lola diego, a student of economics, disagrees with him and says that a hike in fares will decrease profits. which of the following, if true, would strengthen lola's argument? a. the current fare that speedy motors charges is higher than what taxi services in the city charge. b. feedback surveys at the airport show that consumers prefer taking taxis to riding buses because they are faster. c. the demand for taxis at the brezuela airport is consistently high throughout the day. d. speedy motors operates similar airport taxi services in other cities as well. e. speedy motors currently operates at the point where the marginal cost incurred per mile is equal to the marginal revenue earned per mile.

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