Cold Duck Airlines Flies Between Tacoma and Portland

question 196

Multiple Choice

Cold Duck Airlines flies between Tacoma and Portland. The company leases planes on a year-long contract at a cost that averages $600 per flight. Other costs (fuel, flight attendants, etc.) amount to $550 per flight. Currently, Cold Duck's revenues are $1,000 per flight. All prices and costs are expected to continue at their present levels. If it wants to maximize profit, Cold Duck Airlines should

• A)drop the flight immediately.
• B)continue the flight.
• C)continue flying until the lease expires and then drop the run.
• D)drop the flight now but renew the lease if conditions improve.

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