Problem: Two small airlines provide shuttle service between Las Vegas and Reno. The services are alike in every respect except that Fly Right bought its airplane for $500,000, while Fly by Night rents its plane for $30,000 per year. Analyze which airline has lower costs, and explain your reasoning clearly. Be sure to include definitions of accounting and economic costs of operation in your analysis.
Analyze fixed costs, Marginal Costs, Total costs, average total costs per flight volume, etc.