FlyerTalk Forums - View Single Post - What is the value and cost of a lounge visit?
Old Feb 9, 2018 | 1:55 pm
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orbitmic
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Originally Posted by Sixth Freedom
This is not correct because marginal cost is not the same as average cost.
But there is a marginal cost anyway. if only because it is actual consumption that will determine the orders that you talk about. The situation is not dissimilar to a commercial F&B establishment. A customer has a marginal cost. Yes, of course, the food is bought - by definition - before the customer arrives, but the customer has consumed a specific value of food which constitutes his/her marginal cost even though in practice that marginal cost will have been anticipated, and exactly the same in a supermarket where the food is sourced and paid for by the shop in advance based on expected sales but those sales are still the notional marginal cost of each customer. The fact that spending and consumption are diachronic in many trades does not mean that no customer has a marginal cost, just that the marginal cost is anticipated by the supplier and associated with a risk factor for good measure.
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