BlueSky Airlines would like to price discriminate between their vacation and business travelers. Move the points on the rectangle to the area representing the maximized profits BlueSky earns from vacation travelers. Vacation travelers 600 550 Profits 500 O 450 400 350 300 250 200 150 Marginal cost = average cost 100 50 MR Vacation traveler demand 100 200 300 400 500 600 700 800 900 1,000 Quantity of trips Vacation traveler price per trip ($)

BlueSky Airlines would like to price discriminate between their vacation and business travelers. Move the points on the rectangle to the area representing the maximized profits BlueSky earns from vacation travelers. Vacation travelers 600 550 Profits 500 O 450 400 350 300 250 200 150 Marginal cost = average cost 100 50 MR Vacation traveler demand 100 200 300 400 500 600 700 800 900 1,000 Quantity of trips Vacation traveler price per trip ($)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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