Network Contribution and Shut-Down Point

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Abstract

The technical note defines the concept of the shutdown point discussed in the textbooks on microeconomics and considers two exceptions to the general proposition. Both the exceptions apply to the case of an airline business when the decision to discontinue a loss making route that does not meet even the cash costs is involved. The network contribution of a route is discussed in detail to gain better understanding of the issues involved.

Additional Information

Product Type Technical Note
Reference No. ECO0358TEC
Title Network Contribution and Shut-Down Point
Pages 5
Published on Nov 17, 2015
Authors Dholakia, Ravindra H;
Area Economics (ECO)
Keywords Shutdown Point; Network Contribution; Airlines Business; Re-Starting Costs; Average Variable Cost
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