Merkey Motel's cost function based on guest-days of occupancy for custodial cost is given as: Y = $50,000 + $7.50X.Merkey Motel expects an occupancy level of 10,000 guest days.Merkey Motel's expected total fixed cost is _____.
A)$7.50
B)$50,000
C)$75,000
D)$105,000

Question

Quizplus · Accepted Answer

The fixed cost is the constant term in the cost function, which is $50,000. This is the expected total fixed cost for Merkey Motel.

Merkey Motel's Cost Function Based on Guest-Days of Occupancy for Custodial