Multiple Choice
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservation prices are listed in the table.
What is the socially optimal number of bikes for Island Bikes to rent out each day?
A) 6
B) 5
C) 4
D) 3
Correct Answer:

Verified
Correct Answer:
Verified
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