If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, then the expansion would provide ________ to the airlines.
A)economies of scale
B)diseconomies of scale
C)higher average costs but lower total costs
D)higher marginal costs but lower total costs

Question

Quizplus · Accepted Answer

Adding an additional passenger terminal would increase the airport's capacity, which would lead to a decrease in the average cost per airplane landing due to economies of scale. This would provide cost savings and efficiency gains to the airlines, making it easier for them to operate and potentially increase their profits.

If an Airport Decides to Expand by Building an Additional