Question

A regional airline sells 200 tickets to New York City for an average price of $ 175 one way. Half of the people on the flight will purchase a meal for $6. 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 $9000, and the cost of catering food is $1 for each item purchased. 4th attempt Part 1 (4 points)See Hint The airline earns $ (blank) in revenue from tickets and $ (blank) from in-flight purchases. If one flight attendant is staffed for the flight, the airline pays $ (blank) in fixed costs. If the airline has three flight attendants for the flight, the firm earns $ (blank) profit.

Answer 1

Revenue from the ticket sales:

Number of tickets*price

=200*175

=35000

100(half) passengers will purchase a meal for $6

so revenue from meals = 100*6 = 600

So,the airline earns 35000 in revenue from ticket sales and 600 in revenue from in flight purchases

The cost of staffing 1 pilot,1 co-pilot and 1 flight attendant = 500+500+200 = 1200

cost of fuel = 9000

Fixed cost = 1200+9000 = 10200

So,if one flight attendant is staffed for the flight,the airline pays 10200 in fixed cost

cost of three flight attendants = 200*3 = 600

Total cost = 500+500+200(3)+9000+100(1) = 10700

Total revenue = 35000+600 = 35600

So, if the airline has three flight attendants for the flight the firms earns 35600-10700 = 24900 in profits.