Booking a Flight at the Last Minute Is Often Much

question 39

Multiple Choice

Booking a flight at the last minute is often much more expensive than booking months in advance.Why is this the case?

• A)Airlines hope to discourage customers from flying last minute to keep their labour costs down.
• B)The cost of adding a passenger at the last minute is significantly highly than adding one to a flight months ahead of time.
• C)People wanting to book flights at the last minute generally have few alternatives and are therefore willing to pay a lot more than those booking months ahead.
• D)Increasingly, business travel is being replaced with tele-presence (Skye, Facetime, etc.), thereby reducing demand for business travel. To make up for this fall in demand, airlines charge higher rates.

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as materials and labor.

Output

The total amount of goods or services produced by a company, industry, or economy during a given period.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, essentially indicating the per-unit cost of production.