This is a relatively easy question from the PR.
I am having some difficulty understanding the reasoning behind two wrong answers given below.can someone please explain.
In 1994, Tiptop airlinesreported an increase in the total number of passengers it carried from the year before, but a decrease in total revenues -even though prices for its tickets on all routes remained unchanged during the two year period.
Which of the following best resolves the paradox
c)fuel costs remained constant during the two year period
e)tip top did not buy any new airplanes or equipment in 1994
Suppose the fuel costs had not been constant.Then an increase in fuel prices would have increased their costs and cut into the profits, not into their revenues.Why is it that the costs would cut into the profits and not the revenues??