Useful optimization tool in making pricing

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Suppose you provide consulting services on price-setting strategies to a number of airline companies. Please respond to the following questions based on the lecture concepts of this week.
a) In what way the "game theory" can be a useful optimization tool in making pricing decisions by airlines?
b) Critically discuss at least two price-setting strategies that are commonly used by airline companies and predict the impacts of such pricing methods on the demand for seats and the firm's profits.

Reference no: EM13529346

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