Question: Southwest Airlines offers four flights per weekday from Cleveland Ohio
Southwest Airlines offers four flights per weekday from Cleveland, Ohio to Tucson, Arizona. If adding a fifth flight per weekday would cost $15,000 per flight, or $110 per available seat, calculate the incremental costs borne by Southwest following a decision to go ahead with a fifth flight per day for a minimal 60-flight trial period. What is the marginal cost? In this case, is incremental cost or marginal cost relevant for decision making purposes?
Answer to relevant QuestionsSuppose the Big Enchilada restaurant has been offered a binding one-year lease agreement on an attractive site for $5,200 per month. Before the lease agreement has been signed, what is the incremental cost per month of site ...Do operating strategies of average cost minimization and profit maximization always lead to identical levels of output?Three graduate business students are considering operating a fruit smoothie stand in the Harbor Springs, Michigan, resort area during their summer break. This is an alternative to summer employment with a local firm, where ...Give some illustrations of managerial decision situations in which you think the linear programming technique would be useful.Indicate whether each of the following statements is true or false and explain why.A. Constant returns to scale and constant input prices are the only requirements for a total cost function to be linear.B. Changing input ...
Post your question