DASH Airlines is considering the addition of a flight from Red Cloud to David City. The total cost of the flight would be $1,100, of which $800 are fixed costs already incurred. Expected revenues from the flight are $600. DASH should
A)not add this flight, because only flights that cover their full costs are profitable.
B)not add this flight, because it is not profitable at the margin.
C)add this flight, because marginal revenue exceeds marginal costs and total revenue exceeds total variable cost.
D)not add this flight, because total costs exceed total revenue.

Question

Quizplus · Accepted Answer

Marginal revenue exceeds marginal costs and total revenue exceeds total variable cost, so the flight should be added.

DASH Airlines Is Considering the Addition of a Flight from Red