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 ($)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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

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