Once an airline publishes its schedule, the short run marginal cost of an additional passenger is...

Once an airline publishes its schedule, the short run marginal cost of an additional passenger is very low. Explain why the operation of revenue management systems may set some ticket prices below that needed to cover fully-allocated cost.

Expert Solution

Revenue management may sets a few tickets prices below that needed to cover fully-allocated cost in light of the fact that the airline needs to take care of as much expenses as possible, this is the reason there are tickets sold on below prices in the event that you are eager to get it until a minute ago, aircrafts do estimates about the purchase of tickets however there are times they don't have the foggiest idea whether the plane will go on full limit or only half, on that case is ideal to sell tickets below prices so that more clients can get it as opposed to having the plane going with just 10 travelers.

Rahul Sunny answered 2 years ago

A competitive firm’s short run supply curve is equivalent to the portion of its marginal cost...

A competitive firm’s short run supply curve is equivalent to the portion of its marginal cost curve which lies above its average variable cost curve. Explain fully why this is the case. B. Define economic rent. Suppose a competitive firm is able to earn economic profit due to using an especially high-quality and scarce resource. Explain (in words and/or with a graph) how in the long run owners of the scarce resource are able to capture the economic profit from...

The short-run supply curve for a perfectly competitive firm is its A. marginal cost curve above...

The short-run supply curve for a perfectly competitive firm is its A. marginal cost curve above the average variable cost curve. B. marginal cost curve above the average fixed cost curve. C. average variable cost curve above the marginal cost curve. D. average variable cost curve above the average total cost curve. E. average variable cost curve above the average fixed cost curve.

A perfectly competitive firm's short-run supply curve is: A. its marginal cost curve above the AVC...

A perfectly competitive firm's short-run supply curve is: A. its marginal cost curve above the AVC curve B. its marginal cost curve below the marginal revenue curve C. horizontal at the market price D. its total cost curve above the AVC E. its marginal revenue curve below the ATC curve

Q1:What is the relationship between marginal product and marginal cost in short run? Q2:What is the...

Q1:What is the relationship between marginal product and marginal cost in short run? Q2:What is the effect or application of elasticity of demand in real life business? Q3:application of economics in any other fields such as health economics, industrial economics, agricultural economics, choice of cheapest technology out of many? Q4:why do businesses charge different prices for the same product or service... rationale? Q5:If I have a salon, what the best way on economic to get more profit?! Q6:What is the...

The marginal cost of producing a given quantity is always at least as big in the short run as it is in the long run.

True/False/Uncertain: Justify your answers using two or three sentences (at most) for each part. a. Imperfect competition in the labor market will change the combination of labor and capital each firm uses to produce, but will not change the quantity each firm produces, compared to the case of perfect competition. b. The marginal cost of producing a given quantity is always at least as big in the short run as it is in the long run.

1. A nondiscriminating monopolist earning positive short-run economic profit determines that its current marginal cost is...

1. A nondiscriminating monopolist earning positive short-run economic profit determines that its current marginal cost is $15 and its current marginal revenue is $20. To maximize profit, a firm should raise price and increase output raise price and decrease output maintain a constant price and increase output reduce price and increase output shut down 2. A monopolist maximizes profit at the quantity where the slope of its total revenue curve equals the slope of its total cost curve. True False...

1.Marginal profit is equal to marginal revenue plus marginal cost. True or false Spacely Sprockets' short-run...

1.Marginal profit is equal to marginal revenue plus marginal cost. True or false Spacely Sprockets' short-run cost curve is C(q,K)=25q2K+15KC(q,K)=25q2K+15K, where q is the number of Sprockets produced and K is the number of robot hours Spacely hires. Currently, Spacely 2.hires 10 robot hours per period. The short-run marginal cost curve is MC(q,K)=50qKMC(q,K)=50qK. If Spacely receives $250 for every sprocket he produces, his profit maximizing output level is 50. True or False 3.Consider a competitive market in which the market...

Explain the relationship between the marginal cost curve of an individual firm and the short run...

Explain the relationship between the marginal cost curve of an individual firm and the short run market supply curve in a perfect competition industry.

Use marginal analysis (the comparison of additional/marginal benefit with additional/marginal cost) to create some examples of...

Use marginal analysis (the comparison of additional/marginal benefit with additional/marginal cost) to create some examples of your own. Good examples of diminishing returns can be observed from nearly all episodes of the reality TV show "Man v. Food" with Adam Richman or Casey Webb . Find one on the web to use in your essay

In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.

7) T/F In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.8) T/F The limited liability of stockholders in the corporate business structure makes it harder to raise equity capital.9) T/F In the year 2008, nearly three out of four business firms in the United States were organized as proprietorships.10) T/F When demand is relatively price inelastic, price and total revenue will change in the same direction.11) T/F As...

Question