Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 2 - The Key Principles of Economics - Exercises - 2.2 The Marginal Principle - Page 45: 2.7a

Answer

yes

Work Step by Step

The fixed costs will not change, so the marginal cost of the 11th flight is the additional costs for flight crew and food. $20000\div10=2000$ 25 passengers each paying \$100 would bring in marginal revenue of $25\times100=2500$ Since the marginal revenue exceeds the marginal cost, adding the 11th flight makes sense.
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