Airlines That Restrict Members' Ability to Use Frequent Flyer Miles

question 64

Multiple Choice

Airlines that restrict members' ability to use frequent flyer miles during holiday periods likely do so because:

• A)​the opportunity cost to airlines of filling seats with frequent flyers is lower at these times.
• B)​the opportunity cost to airlines of filling seats with frequent flyers is higher at these times.
• C)​passengers have more transportation alternatives available to them at these times.
• D)​airlines want to protect their most loyal customers from the discomfort of overcrowded airplanes.

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Definitions:

Journal Entry

A record in accounting that signifies a transaction and affects the balance sheet and income statement.

Inventory Write-down

A reduction in the value of inventory to reflect its current market value below its listed cost.

Net Income

The net income of a company once all costs and taxes are deducted from the total earnings.

Inventory Valuation

The method used to assign cost or value to inventory, impacting how cost of goods sold and inventory are reported.