Continental Airlines Goes Marginal. In the 1960s, Continental Airlines puzzled observers of the airline industry and dismayed its stockholders by running flights with up to half the seats empty. The average cost of running a flight was $4,000, a figure that includes fixed costs such as airport fees and the cost of running the reservation system. A half-full aircraft generated only $3,100 of revenue.

a. Use the marginal principle to explain why Continental ran half-empty flights.

b. It will be sensible to run a half-empty flight if the marginal _____of flight is _____ than $_____ .