Western Airlines operates five flights daily between Chicago and Phoenix during the winter.One flight leaves Phoenix at 12:10 PM.The plane,a Boeing 737,has a capacity of 120 passengers.During the past month,the flight has averaged only 24 passengers,a load factor of 20 percent.Once the plane takes off,the other 96 seats generate no sales and profits to the airline for that flight.What unique aspect of services does this situation describe?

Question

Quizplus · Accepted Answer

The situation described in the question is an example of idle production capacity, where the airline has unused capacity due to low demand for their service. The capacity is wasted since the other 96 seats generate no sales and profits for the airline on that flight.

Western Airlines Operates Five Flights Daily Between Chicago and Phoenix