Suppose the Cost of Flying a 100-Seat Plane for an Airline

question 60

Multiple Choice

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight.The marginal cost of flying a passenger is

• A)$50.
• B)$500.
• C)$50,000.
• D)This cannot be determined from the information given.

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Definitions:

Market Prices

The current value at which an asset or service can be bought or sold in a marketplace.

Carrying Value

Carrying Value, also known as book value, is the value of an asset as it appears on a balance sheet, calculated by netting the asset against its accumulated depreciation.

Nonvoting Preferred Stock

A type of preferred stock that does not grant the holder voting rights in the company's shareholder meetings, typically in exchange for certain financial preferences.

Outstanding Shares

The total number of shares of stock that are currently owned by shareholders, including shares held by institutional investors and restricted shares held by insiders and company officers.