The WSJ had presented data United Airlines was not covering cost on flights from San Francisco to Washington D.C (Brickley Smith & Zimmerman pg. 215). The article also stated United Airlines should discontinue its services and (Brickley Smith & Zimmerman pg. 215). The costs included that are associated with running the hubs should also be discontinued (Brickley Smith & Zimmerman pg. 215). Suppose the revenue collected on the typical United flight from San Francisco to Washington does not cover these cost. Does this fact imply that United should discontinue these flights? (Brickley Smith & Zimmerman pg. 215). After analyzing the case, United Airlines should discontinue flights from San Francisco to Washington; D.C. United …show more content…
215). When firms lose out on profit in the short term it also the best option is to stay in business. The long-term process in which in firms must be lucrative and the best option is to not be in the market. The important factor to this it would have a potential make a name for the market or not. A marginal analysis benefits from the long-run supply curve is that portion of its long run marginal cost curve above long-run average cost (Brickley Smith & Zimmerman pg. 231). United Airlines should assess a marginal analysis because it would be the useful tool to use an appropriate decision in deciding a necessary decision if needed. Also, the airline should also make some changes on its long-term decisions. The marginal analysis would also help identify certain benefits on the different options by help identify the effect on total cost and revenue which is caused by the unit change of input and output. Since United Airlines marginal revenue must always equal the marginal cost, the airline could take the time to make the necessary adjustments on its long run supply decision, the marginal analysis would assist United Airlines in identifying benefits of various options by identifying the effect of total revenue and cost, it will help keep the balance in the airlines competitive