Some companies impose a minimum charge for services. For example, a caterer may charge $12 per person, with a minimum charge of $120 to host a small dinner party. What is the rationale for a minimum...

Some companies impose a minimum charge for services. For example, a caterer may charge $12 per person, with a minimum charge of $120 to host a small dinner party. What is the rationale for a minimum charge? (Hint: Think about the caterer’s costs in terms of the cost hierarchy)