Delta Rail Is Considering Adding an Additional Run on Its

Delta Rail is considering adding an additional run on its Hope to Princeton commuter route.The total cost of the additional trip is estimated to be $3,000 of which $1,000 are variable costs.The anticipated extra revenues are $1,800.What should the company do?

A) Not add the train since the company will make a loss.
B) Not add the train since the company cannot cover its total fixed costs.
C) Add the train since the loss is less than its total variable costs.
D) Add the train since the marginal revenue of the extra run exceeds its marginal cost.

Correct Answer:

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