SCENARIOS
Continental Lite
In the mid-1990s,Continental Airlines chose to compete head-on with Southwest Airlines by launching Continental Lite,an alternative low-fare commercial airline passenger operation.Top executives at Continental had expected its no-frills operation to break even within a year of its inception,but the airline fell short of the goal.A source close to the company explained it by saying,"Its costs were too high,and its revenues were too low." Some observers criticized Continental's marketing efforts.When the no-frills service was first launched,it lacked a distinct name or identity,missing its chance to make a splash.Then Continental tried to sell three "brands" at once--Lite,a new premium service,and its more traditional long-haul domestic flights.As one rival expressed it,"You cannot be all things to all people."
-Refer to Continental Lite.The statement that Continental Lite had problems because "Its costs were too high,and its revenues were too low," suggests that the airline had no _____ left over after paying for airline activities.
A) ROI
B) revenue
C) profit
D) returns
E) COGS

Question

Quizplus · Accepted Answer

The statement implies that the airline did not make a profit, which means that its costs exceeded its revenues. Therefore, the correct choice is profit (C).ROI refers to return on investment, revenue is the total amount of money earned from sales, returns usually refers to merchandise returned by customers, and COGS refers to the cost of goods sold, which is a component of cost. None of these choices accurately reflect the airline's financial situation described in the scenario.

SCENARIOS Continental Lite