Q3.A delivery company is considering adding another vehicle which rents for $40 per day and a driver who gets paid $80 per day to its delivery fleet. The additional vehicle would be capable of delivering 1000 packages per day and each package that is delivered brings in fifteen cents ($.15) in revenue. (10 pts.)

a. What is the MRP of the vehicle? What is its MRC? Should the firm add this delivery vehicle? Why? (4)

b. Now suppose that the cost of renting the vehicle increases to $80 per day. Should the firm add a delivery vehicle under these circumstances? (2)

c. Next suppose that the cost of renting the vehicle falls back to $40 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. Would adding a vehicle under these circumstances increase the firm's profits? Why/why not? (4)