Standby passengers on airlines who pay low rates for seats benefit from the low price. How are the airlines affected?
a. They lose, because the standby passengers do not cover the full cost of the seats.
b. They gain, because the additional revenue covers the "fixed costs" of the flight.
c. They lose, because the gain of the passengers must necessarily come at the expense of the airline.
d. They benefit as long as the additional revenue from the passengers exceeds the marginal cost.
D
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Earth Movers & Shakers operates 3 iron ore mines. The table below shows each mine's total daily production and the current number of miners at each mine. All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Total TonsPer DayNumber ofMinersMother Lode10025Scraping Bottom3010Middle Drift7515The opportunity cost of moving one miner from Mother Lode to another mine is:
A. 4 tons per day. B. 1 ton per day. C. 2 tons per day. D. 3 tons per day.
Bob's utility function is shown in the above figure. He currently has $100 worth of property, but there is a 50% chance that all of it will be stolen. An insurance company offers to reimburse Bob for his loss if the money is stolen
What is the most that Bob would pay for such a policy? Explain.
When the government bans a good:
A. it is attempting to solve the nonexcludability problem. B. it makes acquiring that good illegal. C. the cost of breaking the ban changes the trade-offs consumers face. D. All of these statements are true.
An asset for a commercial bank is its US govt securities (treasury bonds, bills, and notes)
a. true b. false