You and a group of friends are planning to visit a theme park, which charges $60 for admission, $100 for a two-day pass, and $130 for a three-day pass. Your friends are interested in spending a lot of time there, but they're worried about paying a lot of money. You explain the concept of marginal cost, which helps them see that the additional day is a good value 1st attempt Part 1 (4points) See Hint The average cost per day of a three-day pass is $ per person. The marginal cost of adding the third day is S per person. Part 2 (2 points) See Hint If there are 6 people in your group, the group's marginal cost of switching from the two-day pass to the three-day pass is

Part 1.

Part 2.

Explanation:

The total cost is the admission charge ($60) plust the cost of the pass ($100 or $130).

For a two-day pass that is: $60 + $100 = $160, per person

For a three-day pass that is: $60 + $130 = $190, per person

Part 1. The average cost per day of a three-day pass per person.

The average cost is the total cost divided by the number of days.

The marginal cost of adding the third day per person is found by subtracting the total cost for two days from the total cost for three days:

This says that althoud the average cost for the three days is $53.33 the cost of adding the third day is $30, which is much lower; thus, it is a good deal to buy a three-days pass, as they are interested in spending a lot of time there.

Part 2. The group's marginal cost of switching from the two-day pass to the three-day pass

Since the marginal cost of switching from the two-day pass to the three-day pass is $30 per person, the marginal cost for the 6-person group is 6 times $30:

explanation:

the contractual interest rate is the interest the borrower must pay and the interest the lender receives, or more simply, it is the interest rate stated on a bond whereas the market interest rate is “the investors demand for loaning funds”. therefore, bonds can either be sold at a premium, face value, or discount.