Cold Duck Airlines flies between Tacoma and Portland. The company leases planes on a year-long contract at a cost that averages $600 per flight. Other costs (fuel, flight attendants, etc.) amount to $550 per flight. Currently, Cold Duck's revenues are $1,000 per flight. All prices and costs are expected to continue at their present levels. If it wants to maximize profit, Cold Duck Airlines should
a. drop the flight immediately.
b. continue the flight.
c. continue flying until the lease expires and then drop the run.
d. drop the flight now but renew the lease if conditions improve.
c
You might also like to view...
If aggregate demand is stable and there is economic growth, the economy will experience
A) secular depreciation. B) secular decline. C) secular deflation. D) secular degeneration.
Which of the following is an example of a normative - as opposed to a positive - statement?
a. The discount rate is the interest rate the Federal Reserve charges banks to borrow funds. b. The US income tax rate increases with the amount of income earned. c. The government should increase the tax on gasoline. d. The US unemployment rate increased to 10 percent in 2009.
Which of the following groups is engaging in rent seeking?
a. Karst Salvage, a non-profit that accepts donations to educate people about the importance of caves b. Safer Rides, a group that lobbies elected officials to get safety features added to cars c. Daring Drones, a group that makes donations to officials hoping to get permits to fly in restricted areas d. Long-time Logging, which donates money to campaigns of politicians who promise to help preserve forests
How successful has import-substituting industrialization (ISI) been?
What will be an ideal response?