Question

In 2008 the cost of oil soared, and so did the cost of jet fuel. In repose, American Airlines announced in May of that year that it was cutting some routes and reducing the frequency of flights on other routes.
(a) Is jet fuel a variable cost or a fixed cost?
(b) What did American Airlines gain from reducing the number of flights?
(c) Was the airline more likely to cancel flights that tended to be filled to capacity, or ones that typically flew partly empty? Explain.
(d) As an economist, suggest an alternate plan for American airlines.

Answer 1

Answer:

a) is variable cost

Explanation:

Answer 2

Explanation:

jet fuel is variable cost