Answer
Continental airlines ran half-empty flights because the marginal benefit (revenue) was greater than the marginal cost.
Work Step by Step
The marginal cost does not include fixed costs. The concept of fixed costs is such, that regardless of Continental flying or not, the company would still incur those costs. Thus, it was sensible to try to cover the fixed costs, even though they were making a net loss.
Think about it this way: Even though continental made a loss of 900 dollars, they would have made a loss of more than 900 dollars if they had not run the half-full flight.
