QuestionMay 25, 2025

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 cos of flying a passenger is a. 50 b. 500 C. 50,000 d. This cannot be determined from the information given

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 cos of flying a passenger is a. 50 b. 500 C. 50,000 d. This cannot be determined from the information given
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 cos of flying a passenger is a. 50 b. 500 C. 50,000 d. This cannot be determined from the information given

Solution
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Answer

a. \ 50 Explanation 1. Understand Marginal Cost The marginal cost is the additional cost incurred by producing one more unit. Here, it refers to the cost of flying one additional passenger. 2. Analyze Given Information The total cost of flying the plane is fixed at \ 50,000, regardless of the number of passengers, as long as it's within capacity. 3. Determine Additional Costs Since the plane has empty seats and the cost of flying the plane does not change with an additional passenger, the only additional cost is any variable cost directly associated with that passenger. 4. Evaluate Options The problem implies that the marginal cost is a small additional cost per passenger, typically covering things like food or service, which aligns with option (a) \ 50.

Explanation

1. Understand Marginal Cost<br /> The marginal cost is the additional cost incurred by producing one more unit. Here, it refers to the cost of flying one additional passenger.<br /><br />2. Analyze Given Information<br /> The total cost of flying the plane is fixed at $\$ 50,000$, regardless of the number of passengers, as long as it's within capacity.<br /><br />3. Determine Additional Costs<br /> Since the plane has empty seats and the cost of flying the plane does not change with an additional passenger, the only additional cost is any variable cost directly associated with that passenger.<br /><br />4. Evaluate Options<br /> The problem implies that the marginal cost is a small additional cost per passenger, typically covering things like food or service, which aligns with option (a) $\$ 50$.
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