After 9/11, the demand for air travel fell substantially, bringing the airline industry to its knees. congress wanted to compensate the airlines for losses but there was a great debate over how much money was at stake.
how would you estimate the amount of compensation? hint: producer surplus.

I would estimate the amount of compensation based on the statistical data relating to the loss that the airline companies are facing since 9/11.

Explanation:

The surplus that the airline companies were earning over their operational expenses was nothing else but the profit margin that the companies were earning from the business. To devise the compensation to be given to the companies, calculating the surplus that they were earning from their operations would thus prove to be an intelligent solution.

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.