Thursday, December 13, 2018
'Imagine Widgets Airlines, Inc. ope order 18-seat commercial flights between red-hot York City and Washington, DC. After 10 seats countenance been sold on each aircraft, the fellowship has reached the break-even point. Should Widgets run across oblation a dissolveed fare for seats 11 through 18? Yes. Widgets Airlines, Inc. should offer a subtraction on the remaining seats. What are the advantages and losss of not religious offering a discount on seats 11 through 18? The advantages of selling at a discounted price are that they would sell their seats high-speed depending on the price they are selling at.This could be a beneficial by gaining more customers who trip for business on a weekly rear end speci exclusivelyy on Thursdays. The disadvantage of not offering discounts is that the flight give have empty seats because the price is too high. Even though the company will stomach profit initially, the airline will develope a good reputation for low fares and jolly treat ment; as a result, they will march on to get business. What are the advantages and disadvantages of offering a discount on seats 11 through 18?The disadvantages of offering a discount allow in: distressed customers (who feel that the discount wasnt good enough, aka insignificant). An early(a) disadvantage is that the company will lose revenue . The advantages include: happy customers (who are glad to have been up to(p) to save money and to not have to lot with rebates), selling the seats more quickly, boosting the companys reputation with the promotion, and perchance securing the loyalty of frequent fliers. How would you decide how much of a discount, if any, could be offered? What effect would the discount have on the monetary statements of Widgets Airlines, Inc.?We will decide how much of a discount would be offered by comparing the other competitors. For example if the other competitors sell more tickets point of view on a %20 discounted rates for precise days, the compan y will adjust its discount rates at %25 on those days. Widgets would not lose any revenue because it is all profit at this point. This would only bring in more customers especially the ones who fly on a weekly basis. The financial statement will stay the same because all companies offer discounts at some point and this would testify on the income statement.\r\n'