What is the marginal cost of a flight

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Suppose an airline is losing money because they cannot fill enough seats in their flights with passengers. The airline would offer a flight only if at least 70% of the seats could be filled. The average total cost for the typical flight is $12,600. Of this amount, $3,700 is the cost of the firm’s fixed inputs and $8,900 is the cost of its variables inputs. The average variable cost remains the same no matter how many flights are offered. The airline flies 60 seat jets and charges $300 per ticket. The market where the firm operates can be viewed as perfectly competitive.

What is the marginal cost of a flight?

Reference no: EM13853340

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