The marginal cost of flying Bob from Chicago to Dallas-Fort Worth can be calculated by multiplying the distance (1,000 miles) by the cost per passenger-mile (R0.06).
Marginal cost = 1,000 miles x R0.06 = R60
Therefore, the marginal cost of flying Bob from Chicago to Dallas-Fort Worth is R60.
American Airlines makes numerous nonstop flights from Chicago's O'Hare Airport to the airport at Dallas-Fort Worth. The distance between those two cities is 1,000 miles. The only variable cost, fuel, costs R0.06 for each passenger-mile it flies. Bob, on his way to an emergency business meeting, buys a ticket in coach class for R1,300 at the very last minute. The marginal cost of flying Bob from Chicago to Dallas-Fort Worth is:
b and e.
higher than the average cost of previous passengers.
R600.
R160.
R60.
1 answer
41 answers