A regional airline sells 200 tickets to New York City for an average price of $200 one way. Half of the people on the flight will purchase a meal for $5. The airline's employee costs per flight include $500 each for the pilot and copilot, and $200 for each flight attendant. The law requires airlines to have at least one pilot, copilot, and flight attendant for each flight. Fuel for the flight is expected to cost $10000, and the cost of catering food is $1 for each item purchased. Show Transcribed Text The airline earns $ in revenue from tickets and $ from in-flight purchases. in fixed costs. profit. If one flight attendant is staffed for the flight, the airline pays $ If the airline has three flight attendants for the flight, the firm earns $ Show Transcribed Text What happens to profit in each of the following scenarios, given the information in Part 1 above? Scenario 1. An unexpected fuel shortage results in an increase in the price of fuel for the foreseeable future. 2. A large conference is announced in New York, which results in an increase in demand for seats on flights to New York. 3. A competing airline opens a route, which increases the supply of flights to New York City. 4. The pilots' union negotiates higher wages for pilots and copilots. Change in Profit stays the same increases decreases

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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A regional airline sells 200 tickets to New York City for an average price of $200 one way. Half of the people on the flight will purchase a meal for $5.
The airline's employee costs per flight include $500 each for the pilot and copilot, and $200 for each flight attendant. The law requires airlines to have
at least one pilot, copilot, and flight attendant for each flight. Fuel for the flight is expected to cost $10000, and the cost of catering food is $1 for each
item purchased.
Show Transcribed Text
The airline earns $
in revenue from tickets and $
from in-flight purchases.
in fixed costs.
profit.
If one flight attendant is staffed for the flight, the airline pays $
If the airline has three flight attendants for the flight, the firm earns $
Show Transcribed Text
What happens to profit in each of the following scenarios, given the information in Part 1 above?
Scenario
1. An unexpected fuel shortage results in an increase in the price of fuel for the
foreseeable future.
2. A large conference is announced in New York, which results in an increase in
demand for seats on flights to New York.
3. A competing airline opens a route, which increases the supply of flights to New York
City.
4. The pilots' union negotiates higher wages for pilots and copilots.
Change in Profit
stays the same
increases
decreases
Transcribed Image Text:A regional airline sells 200 tickets to New York City for an average price of $200 one way. Half of the people on the flight will purchase a meal for $5. The airline's employee costs per flight include $500 each for the pilot and copilot, and $200 for each flight attendant. The law requires airlines to have at least one pilot, copilot, and flight attendant for each flight. Fuel for the flight is expected to cost $10000, and the cost of catering food is $1 for each item purchased. Show Transcribed Text The airline earns $ in revenue from tickets and $ from in-flight purchases. in fixed costs. profit. If one flight attendant is staffed for the flight, the airline pays $ If the airline has three flight attendants for the flight, the firm earns $ Show Transcribed Text What happens to profit in each of the following scenarios, given the information in Part 1 above? Scenario 1. An unexpected fuel shortage results in an increase in the price of fuel for the foreseeable future. 2. A large conference is announced in New York, which results in an increase in demand for seats on flights to New York. 3. A competing airline opens a route, which increases the supply of flights to New York City. 4. The pilots' union negotiates higher wages for pilots and copilots. Change in Profit stays the same increases decreases
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