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Homework answers / question archive / The world's largest passenger plane (Airbus) has proven to be the most expensive plane ever developed, but Airbus claims its fuel efficiency and other features make it the most advanced
The world's largest passenger plane (Airbus) has proven to be the most expensive plane ever developed, but Airbus claims its fuel efficiency and other features make it the most advanced. The Dreamliner travels the same distance as the Airbus at the same speed but carries half the passengers. As an airline executive of a company that uses both Airbus and Dreamliner planes, thinking in the long run and using the long-run average total cost curve, when might it be best to use the Dreamliner? When might it be best to use the Airbus?
I would definitely prefer Airbus when individuals are found of traveling the particular place during the peak season whereas Dreamliner during the normal season because there are fewer people who travel by Dreamliner. Thus, the normal season doesn't require the use of Airbus. But, at the peak season, since the number of travelers rises, the use of Airbus becomes worthy.
Thus, it can be inferred that there is a reduction in the average total cost during the peak season for Airbus as it has more passengers to travel; therefore, Airbus has more capacity than Dreamliner making the average total cost of Dreamliner more than Airbus.
The term average total cost refers to the cost that is inclusive of both the average fixed cost and average variable cost wherein both of these cost rises as the production rises and vice versa.
