Does the singleprice policy maximize the airline s profit

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Reference no: EM131132925

Airline Pricing. Consider an airline that initially has a single price of $300 for all consumers. At this price, it has 120 business travelers and 80 tourists. The airline s marginal cost is $100. The slope of the business demand curve is $2 per traveler, and the slope of the tourist demand curve is $1 per traveler. Does the singleprice policy maximize the airline s profit? If not, how should it change its prices?

Reference no: EM131132925

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