As the exclusive carrier on a local air route, a regional airline must determine the number of
Question:
a. What is the airline’s profit-maximizing fare? How many passengers does it carry per week, using how many flights? What is its weekly profit?
b. Suppose the airline is offered $4,000 per week to haul freight along the route for a local firm. This will mean replacing one of the weekly passenger flights with a freight flight (at the same operating cost). Should the airline carry freight for the local firm? Explain.
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Related Book For
Managerial economics
ISBN: 978-1118041581
7th edition
Authors: william f. samuelson stephen g. marks
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