Suppose that Southwestern Airlines flight 171 will depart BWI for Detroit in 3 hours. The marginal cost and average cost of flying a customer are $35 and $68, respectively. Southwestern Airlines can increase its profits by selling a ticket for no less than:
A) $68.
B) $103.
C) $34.
D) $35.

Question

Quizplus · Accepted Answer

The airline can increase its profits by selling a ticket for any price above the marginal cost, which is $35. Selling at the marginal cost or higher ensures that each additional ticket sold contributes to covering fixed costs and potentially increasing profits.

Suppose That Southwestern Airlines Flight 171 Will Depart BWI for Detroit