Consider an airline’s decision about whether to cancel a particular flight that hasn’t sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Number of Passengers 0, 10, 20, 30, 40, 50, 60, 70, 80, 90, 100 Total Cost (Dollars per flight) 40,000, 60,000,65,000, 68,000,70,000, 71,000, 72,500, 73,500, 74,000, 74,300,74,500 Given the information presented in the previous table, the fixed cost to operate this flight is $ . At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price per ticket 1,000, 700, 400, 200 Quantity Demanded (Dollars per ticket) (Tickets per flight) 0, 30, 90, 100 Complete the following table by computing total revenue, total cost, variable cost, and profit for each of the prices listed. (Hint: Be sure to enter a minus sign before the number if the numeric value of an entry is negative.) Price per ticket 1,000, 700, 400, 200 Total Revenue (Dollars) 0,Total Cost Dollars 40,000, Variable Cost Dollars 0, Profit Dollars 040,000. Given this information, the profit-maximizing price is per ticket, and seats out of 100 will be purchased. In this case, which of the following statements are true about the market at this price–quantity combination? Check all that apply. -The airline is operating at too big a loss and should, therefore, cancel this flight. -Total revenue is greater than variable cost. -Price is less than average total cost. -Profit is positive If fixed cost increases to $57,500, does this change the production decision of the airline in the short run? Yes No
Consider an airline’s decision about whether to cancel a particular flight that hasn’t sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Number of Passengers 0, 10, 20, 30, 40, 50, 60, 70, 80, 90, 100 Total Cost (Dollars per flight) 40,000, 60,000,65,000, 68,000,70,000, 71,000, 72,500, 73,500, 74,000, 74,300,74,500 Given the information presented in the previous table, the fixed cost to operate this flight is $ . At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price per ticket 1,000, 700, 400, 200 Quantity Demanded (Dollars per ticket) (Tickets per flight) 0, 30, 90, 100 Complete the following table by computing total revenue, total cost, variable cost, and profit for each of the prices listed. (Hint: Be sure to enter a minus sign before the number if the numeric value of an entry is negative.) Price per ticket 1,000, 700, 400, 200 Total Revenue (Dollars) 0,Total Cost Dollars 40,000, Variable Cost Dollars 0, Profit Dollars 040,000. Given this information, the profit-maximizing price is per ticket, and seats out of 100 will be purchased.
In this case, which of the following statements are true about the market at this price–quantity combination? Check all that apply.
-The airline is operating at too big a loss and should, therefore, cancel this flight.
-Total revenue is greater than variable cost.
-Price is less than average total cost.
-Profit is positive
If fixed cost increases to $57,500, does this change the production decision of the airline in the short run? Yes No
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