In this question, I ask you to consider the market for flights from Seattle to Fresno (California). Alaska Airlines have a monopoly on this route. There are two types of travellers. Leisure travellers derive a value of $200 from flying this route if the itinerary includes a Saturday night stay, and $175 if the itinerary doesn’t include a Saturday night stay. Business travellers derive a value of $100 from flying this route if the itinerary includes a Saturday night stay, and $450 if the itinerary doesn’t include a Saturday night stay. What prices do you suggest that Alaska charge for itineraries that include a Saturday night stay, and those that do not include a Saturday night stay?How might business travellers respond to the pricing strategy you suggested?
In this question, I ask you to consider the market for flights from Seattle to Fresno (California). Alaska Airlines have a
What prices do you suggest that Alaska charge for itineraries that include a Saturday night stay, and those that do not include a Saturday night stay?How might business travellers respond to the pricing strategy you suggested?
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