Sunday
April 20, 2014

Homework Help: Economics/Math

Posted by too old on Sunday, November 8, 2009 at 10:35pm.

Airline pricing is a good example of price discrimination. Airlines set different prices for first-class and excursion. Suppose the economics division of a major airline company estimates the demand and marginal revenue functions for first-class and excursion fares from Los Angeles to Beijing as:
First Class
Qa = 2100 - 0.5 Pa
MRa = 4200 - 4 Qa

Excursion
Qb = 8800 - 4 Pb
MRb =2200 - 0.5 Qb

where Q = number of passengers and P = ticket price

a. If the marginal cost of production is $200 per passenger, what fare and what number of passengers will maximize profit?

b. Would the airline make more profit by charging a single price? (If a single price is to be set, the demand equations from each market segment have to be combined)

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Economics/Algebra - Airline pricing is a good example of price discrimination. ...
To: Economyst - Can you please help? - Airline pricing is a good example of ...
economics - Suppose two competing airlines that service passengers only between ...
economics - suppose the demand curve for a product is given by Q=10-2P+Ps1,where...
managerial economics - Entry of new airlines to the CARICOM region is severely ...
Economic Theory - What is the price elasticity of supply for your chosen ...
Managerial Economics/Math - This is an MBA-level Managerial Economics course. I ...
ECONOMICS !!!!! Help me *** - Fortune magazine reported that SkyWest, an ...
Economics - 7. Fortune magazine reported that SkyWest, an independent regional ...
managerial economics - Fortune magazine reported that SkyWest, an independent ...

Search
Members