An airline decides to sell 5 seats that would otherwise remain unoccupied on a flight from California to Chicago for $300 each, instead of the regular price per ticket of $450 each. We can probably conclude that:

Question

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The airline is selling the 5 seats for $300 each, which is less than the regular price of $450 each. This suggests that the marginal cost of providing each added seat is less than $300. If the airline was losing money by selling the seats for $300, they would not offer this discounted price. Therefore, it is safe to assume that the airline is still making a profit by selling the seats at this discounted price, which indicates that the marginal cost of providing each added seat is less than $300.

An Airline Decides to Sell 5 Seats That Would Otherwise