Chapter 12, Problem 96.1C

To determine

Introduction:

For the airline industry, fuel is a very important element because airplane cannot fly without fuel. The cost of fuel is very important for the company. A plane like a Boeing 747 uses roughly 1 gallon of fuel (around 4 liters) consistently.

As far as working cost is concerned, the greatest variable is the cost of fuel. This is straightforwardly identified with the cost of unrefined petroleum.

To discuss:

The way you would respond t the raised fuel price.