Sunday
September 21, 2014

Homework Help: To: Economyst - Can you please help?

Posted by too old on Wednesday, November 11, 2009 at 9:13pm.

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. ...
Economics/Math - Airline pricing is a good example of price discrimination. ...
Economics - For each of the following products, write a few sentences answering ...
Managerial Economics - Suppose the two rival office supply companies Office ...
Managerial Economics - Suppose the two rival office supply companies Office ...
managerial economics - Suppose the two rival office supply companies Office ...
managerial economics - Discuss, in some detail, the following pricing concepts, ...
economics - Suppose two competing airlines that service passengers only between ...
Macroeconomics - inflation! - Hi! I had to graph inflation/unemployment... Why ...
Managerial Economics/Math - This is an MBA-level Managerial Economics course. I ...

Search
Members