Answered

Discover a wealth of knowledge at Westonci.ca, where experts provide answers to your most pressing questions. Connect with a community of experts ready to help you find solutions to your questions quickly and accurately. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

An airline has a marginal cost per passenger of $20 on a route from Minneapolis to Dallas. At the same time, the typical fare charged is $300. The planes that fly the route are usually full, yet the airline claims it loses money on the route. This loss may occur because

Sagot :

jepessoa

Answer:

The fixed costs are too high. The marginal cost generally represents variable costs and they might be very low, but if the fixed costs are simply too high, they will need to increase the price of the plane tickets in order to break even. The break even formula is calculated by dividing total fixed costs by marginal revenue (selling price - variable costs).

We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.