Figure 7-4
-Following a rash of airplane bombs, the airlines have been forced to increase security at a cost of $30 million per year.The number of inspectors and machines does not vary with the number of passengers; the airlines must have sufficient staff available to handle the full-capacity load.Which graph in Figure 7-4 best illustrates the impact of the security expenditures?
A)1
B)2
C)3

Question

Figure 7-4 
-Following a rash of airplane bombs, the airlines have been forced to increase security at a cost of $30 million per year.The number of inspectors and machines does not vary with the number of passengers; the airlines must have sufficient staff available to handle the full-capacity load.Which graph in Figure 7-4 best illustrates the impact of the security expenditures?
A)1 
B)2 
C)3

Quizplus · Accepted Answer

Graph 3 shows a constant line, which represents the fixed cost of security expenditures. As the number of passengers increases (as shown by the increasing slope of the line), the cost per passenger decreases. This suggests that the impact of security expenditures is not proportional to the number of passengers, and airlines must pay a fixed cost regardless of how many passengers they have.

Figure 7-4 -Following a Rash of Airplane Bombs, the Airlines Have Been