An airline finds itself with so many potential customers that all of its flights sell out. It decides to offer more flights around the clock with its existing fleet. Which of the following is NOT example of a variable cost of offering more flights?

Question

Quizplus · Accepted Answer

The cost of purchasing another plane is a fixed cost, not a variable cost. Variable costs change with the level of output (in this case, the number of flights), such as hiring more staff or buying more snacks for the flights. Purchasing another plane is a one-time expense that does not vary with the number of flights operated.

An Airline Finds Itself with So Many Potential Customers That