The e-ticket system and paper tickets are alternative methods of providing tickets to airline passengers. Each is produced using a different production method. In the short run, an airline will be...

The e-ticket system and paper tickets are alternative methods of providing tickets to airline passengers. Each is produced using a different production method. In the short run, an airline will be restricted to using one or other of these methods. In the long run, though, it can choose whichever method it wants. a What do you think are likely to be the differences in fixed costs and short-run marginal costs between the production methods for e-tickets and paper tickets? b Draw a graph showing how you think the short-run average total cost of each production method will vary with the number of passengers carried. c How should a profit-maximising airline decide between the alternative methods of providing tickets to passengers? d How do you think the gains from switching to an e-ticket system will vary by the size of an airline (that is, number of passengers carried)?