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UkoKoshka [18]
2 years ago
5

After 9/11, the demand for air travel fell substantially, bringing the airline industry to its knees. Congress wanted to compens

ate the airlines for losses but there was a great debate over how much money was at stake.
How would you estimate the amount of compensation? Hint: producer surplus.
Business
1 answer:
madam [21]2 years ago
3 0

<u>Answer: </u>

I would estimate the amount of compensation based on the statistical data relating to the loss that the airline companies are facing since 9/11.

<u>Explanation: </u>

  • The surplus that the airline companies were earning over their operational expenses was nothing else but the profit margin that the companies were earning from the business.
  • To devise the compensation to be given to the companies, calculating the surplus that they were earning from their operations would thus prove to be an intelligent solution.
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