Q8.3 Southwest Airlines offers four flights per weekday from Cleveland, Ohio, to Tucson, Arizona. If adding a
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Q8.3 Southwest Airlines offers four flights per weekday from Cleveland, Ohio, to Tucson, Arizona. If adding a fifth flight per weekday would cost $15000 per flight, or
$110 per available seat, calculate the incremental costs borne by Southwest following a decision to go ahead with a fifth flight per day for a minimal 60-flight trial period.
What is the marginal cost? In this case, is incremental cost or marginal cost relevant for decision-making purposes?
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