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Suppose that flying a 200-seat plane across the United States costs the airline $100,000. In this case, the average cost of each seat is $100,000/200,
Suppose that flying a 200-seat plane across the United States costs the airline $100,000. In this case, the average cost of each seat is $100,000/200, which is $500.Imagine that a plane is about to take off with three empty seats, and a standby passenger waiting at the gate will pay only $200 for a seat.
How to compute the marginal cost of one additional passenger on the flight?If you were a supervisor in charge of this flight, under what circumstances would you sell the ticket to this standby passenger?
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