Short and long run viewpoint

Reference no: EM1311925

An airline is flying between two cities. The airline has the following costs associated with the flight:

Crew	$4000
Plane daily depreciation	$2000
Fuel	$1000
Plane daily insurance	$2000
Landing fee	$1000

The airline has an average of 40 passengers paying an average of $200 for this flight. Do you think the airline should be flying between the two cities? Evaluate from a short-run and long-run perspective.

Reference no: EM1311925

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