Opportunity-cost theory suggests that the cost to an airline of letting its employees fly at no charge...

Question

Opportunity-cost theory suggests that the cost to an airline of letting its employees fly at no charge...

A.is greater around the Christmas holidays
B.will depend upon the value employees place upon travel
C.zero
D.depends upon alternatives avaliable to the employees

is it c?

Answer 1

I agree, if the employees are using seats that have not been sold.

Answer 2

No, the correct answer is D. The opportunity-cost theory suggests that the cost to an airline of letting its employees fly at no charge depends upon the alternatives available to the employees. Opportunity cost refers to the value of the next best alternative that is foregone when a choice is made. In this case, if the airline allows its employees to fly for free, they are giving up the potential revenue they could have earned by selling those seats to paying customers. The cost to the airline is determined by the potential lost revenue from those alternative options available to the employees. Therefore, the answer is D - depends upon alternatives available to the employees.