ECO404 GDB1 Solution and discussion


  • Cyberian's Gold

    Total Marks 5
    Starting Date Wednesday, July 31, 2019
    Closing Date Tuesday, August 06, 2019
    Status Open
    Question Title GDB
    Question Description
    The case:

    Pakistan International Airlines (PIA) has started pre-Hajj operation from 4th July, 2019, and it will continue till fifth of the next month as per the decision of Minister for Aviation Ghulam Sarwar Khan in Islamabad. It was told by minister that PIA has planned a total of 294 flights for intending pilgrims. As per this plan suppose PIA is offering 10 flights per day from Lahore to Saudi Arabia. Due to the heavy rush of Hujaj Karam manager of PIA, with the approval of Minister for Aviation, has decided to add 11th flight per day in order to avoid any unavoidable circumstances. If minister of Aviation permits and it becomes possible then it would cost Rs.180, 000 per flight, or Rs.2000 per available seat and this decision is also helpful to increase revenue of the PIA.

    Requirement:
    Being a student of economics identify which type of cost is applied for this decision to add the hajj flight per day. Will that identified concept of cost be relevant for decision making purposes or not? Discuss.



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