1. A $10 decrease in the daily fee should result in a 200-unit increase in monthly sales. However, because of capacity constraints, the last 50 guide-days would be provided by subcontracting to another firm at a cost of $50 per guide-day. (The $50 cost includes food, guides, supplies, and insurance.)
2. An Italian tour agency has proposed to place a special, one-time order for 300 guide-days next month at a special fee of $80 per guide-day. The agency would pay all insurance costs. There would be additional fixed administrative costs of $500. Assume additional capacity beyond 800 guide-days is not available.

Applications of Differential Analysis Adventure Expeditions offers guided back-country hiking/camping trips in British Columbia. Adventure provides a guide and all necessary food and equipment at a fee of $100 per person per day. Adventure currently provides an average of 600 guide-days per month in June, July, August, and September. Based on available equipment and staff, maximum capacity is 750 guide-days per month. Monthly variabl and fixed operating costs (valued in Canadian dollars) are as follows