What is the marginal revenue from a full flight

Assignment Help Business Economics

Reference no: EM13860676

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.

a. What is the marginal revenue from a full flight?

b. If an airline offers a flight with 70% of its seats filled, by how much will it increase or decrease the losses?

Reference no: EM13860676

Questions Cloud

Required to recover the capital with the desired interest : An interest rate of 10% compounded continuously is desired on an investment of $15,000. How many years will be required to recover the capital with the desired interest if $2,030 is received each year? (Please show formula used and work)

Write an essay on global citizenship : Write an essay on given topic- Global Citizenship (GC). choose three elements of global citizenship from these options (education, human rights, cultural, business, environment, etc) and then write one paragraph about each element

Geometrically increasing series of payments : Find the present-value equivalent to the following geometrically increasing series of payments.

Find the equal annual payment series : Find the equal annual payment series that would be equivalent to the following increasing series of payments if the interest rate is 12%.

What is the marginal revenue from a full flight : 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. W..

Series of prospective payments : What is the present value of the following series of prospective payments?

Canadian market supply curve for corn : How would each of the following affect the Canadian market supply curve for corn?

Reserves-required reserves and excess reserves : Suppose that Best National Bank currently has $50,000 in demand deposits and $32,500 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Reserves? Required Reserves? Excess Reserves?

Financial institutions helped our economic recovery : How has the tightening of consumer credited effected individual spending and in turn the U.S. economy? Has this strategy by the financial institutions helped our economic recovery?

User Account

All Pages