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Problem:

Airline is flying between 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 average of 40 passengers paying an average of $200 for this flight. Do you believe the airline must be flying between the two cities?  Assess from the short-run and long-run perspective.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M910543

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