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Estimate from a short and long run viewpoint. 

An airline is flying among two cities.  The airline has the subsequent costs associated with the flight:

Crew

$4000

Plane daily depreciation

$2000

Fuel

$1000

Plane daily insurance

$2000

Landing fee

$1000

The airline has an average of 40 passengers paying an average of $200 for this flight.  Do you think the airline should be flying among the two cities?  Evaluate from a short-run and long-run perspective.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M917105

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