-The figure above shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between Los Angeles and Toronto. If the airline is regulated using a marginal cost pricing rule ________ flights will be offered each month at a price of ________ per flight.

Question

Quizplus · Accepted Answer

Under marginal cost pricing, the price is set where the marginal cost curve intersects the demand curve. This occurs at 400 flights per month at a price of $100 per flight.

-The Figure Above Shows the Marginal Revenue, Marginal Cost, and Demand