An airline is flying between two cities. The airline's costs associated with this flight are given in the table below. The airline has an average of 40 passengers paying an average of $200 for this flight. Do you think that the airline should be flying between the two cities? Evaluate from
a. A short-run and
b. A long-run perspective.
Your answers should be fully justified and all necessary calculations shown.
Crew.......................................$4,000
Fuel........................................$1,000
Landing fee...............................$1,000
Plane daily depreciation.................$2,000
Plane daily insurance.....................$2,000