An Airline Can Increase Its Profit by Offering Standby Customers

question 111

Multiple Choice

An airline can increase its profit by offering standby customers an unsold seat at a substantial discount just before takeoff because

• A) additional passengers are needed to balance the load.
• B) the marginal cost of additional passengers is very small.
• C) additional passengers add little to fixed costs.
• D) such passengers add more to profits than do those with reserved seats.

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Definitions:

Nursing Homes

Facilities for the elderly or disabled that provide a range of medical and personal care services.

Medicare

A federal health insurance program in the United States for people who are 65 or older, as well as for some younger people with disabilities.

Cooptation

A strategy by which members of a group are absorbed or assimilated to quell dissent and secure authority.

Hospices

Specialized care facilities or services that provide support and care for those in the final phase of a terminal illness, focusing on comfort and quality of life.