Average variable cost of producing airline trips

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Reference no: EM131090916

Suppose you are given the following information on All Around Airlines. The average variable cost of producing airline trips varies between 14.5 cents a mile when 50,000 trips per year are produced to 16.7 cents per mile when 500,000 trips per year are produced. Its lowest value is 11.5 cents a mile when 250,000 trips are produced the average total cost of producing trips varies between 19.3 cents per mile when 50,000 trips are produced to 18.3 cents per mile when 500,000 trips are produced. Minimum short run average total cost is 13.0 cents when 300,000 trips are produced.

A. Approximately, how many trips will be produced in the short run if the fare is 15.4 cents per mile?

B. Will any trips be produced if the fare is 12.1 cents per mile? If so, why; if not, why not?

C. Will any trips be produced if the fare is 10 cents per mile? If so, why; if not, why not?

Reference no: EM131090916

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