An Airline Is Considering Adding a Flight from Chicago to Sioux

question 125

Multiple Choice

An airline is considering adding a flight from Chicago to Sioux Falls.Total cost of the flight is $5,500.Variable cost is $2,000.Revenue from the flight is expected to be $3,000.Should the flight be added?

• A)No, the revenue ($3,000) is below the cost ($5,500.) 
• B)No, the addition to profit is very small and not worth the effort.
• C)Yes, profit increases by $1,000 ($3,000 − $2,000.) 
• D)Yes, profit increases by $3,000.