Exercises 18-36 (Algo) Cost Allocation; Sharing Cab Fare [LO 18-3]

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Suppose there are three passengers sharing a single cab ride and that passenger As usual fare to his destination would be $18, passenger Bs usual fare to her destination would be $18, and passenger Cs fare would be $36. Because they are sharing the cab, and assuming no surcharge, the total cab fare is $36, rather than the $72 they would have had to pay in total individually. So there is a $36 saving to sharing the cab.

Part 2 (Algo)

3. Explain how you would split the total cost of the cab fare and why. Are there other ways that could be sensible and/or fair?