If an Airline Company Has Several Empty Seats on a Flight

question 215

Multiple Choice

If an airline company has several empty seats on a flight and the full price of an air ticket is $500 and the marginal cost per passenger is $100, then it will be profitable for the airline to

• A) charge a stand-by passenger no less than the full fare of $500.
• B) charge a stand-by passenger less than $100.
• C) charge a stand-by passenger more than $500.
• D) charge a stand-by passenger more than $100.
• E) fill the seats at the last minute for any price.

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Definitions:

Asset

An item or resource owned by an individual or a business, having economic value and expected to provide future benefits.

Direct Material

Raw materials that are directly incorporated into a finished product and can be easily traced.

Indirect Material

Materials used in the production process that can't be directly traced to a finished product, such as lubricants and cleaning supplies.

Storeroom

A designated space for storing inventory, tools, and materials, often found in a manufacturing or production facility.