Question

If fixed cost increases to $46,000, does this change the production decision of the airline in the short run?

A) Yes
B) No
C) It depends on other factors
D) Can't be determined

Answer 1

In the short run, a fixed cost increase of $46,000 may change the production decision of an airline depending on other factors.

Step-by-step explanation:

In the short run, a fixed cost increase of $46,000 may change the production decision of an airline depending on other factors. The production decision is typically based on comparing the total cost of different production methods and selecting the one with the lowest cost.

If the fixed cost increase does not lead to a significant increase in the total cost compared to other methods, it may not change the production decision. However, if the increase in fixed cost significantly raises the total cost, then it may affect the production decision.

Therefore, the answer to the question is C) It depends on other factors.