Suppose the Cost of Flying a 200-Seat Plane for an Airline

question 181

Multiple Choice

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to pay $300, the airline should

• A)sell the ticket because the marginal benefit exceeds the marginal cost.
• B)sell the ticket because the marginal benefit exceeds the average cost.
• C)not sell the ticket because the marginal benefit is less than the marginal cost.
• D)not sell the ticket because the marginal benefit is less than the average cost.