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An airline is flying between two cities. The airline has the following costs associated with the flight: Crew-$4,000 Plane daily depreciation-$2,000 Fuel-1,000 Plane daily insurance-2,000
An airline is flying between two cities. The airline has the following costs associated with the flight:
Crew-$4,000
Plane daily depreciation-$2,000
Fuel-1,000
Plane daily insurance-2,000
Landing fee-1,000
The airline has an average of 40 passengers paying an average of $200 for this flight.
Do you think the airline should be flying between the two cities? Evaluate from a short-run perspective.
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