Holiday makers only want to fly into ontario
Course:- Business Economics
Length: 666 words
Reference No.:- EM13149091

Assignment Help
Assignment Help >> Business Economics

An airline is interested in the relationship between two routes - the New York-to-Los Angeles(LAX) segment and the New York-to-Ontario route. Assume that business travellers want to go to Los Angeles,  but can fly into Ontario if they have to. On the other hand, holiday makers only want to fly into Ontario (they value a flight to Los Angeles at $0) and have a lower value of a flight than business travellers. What pricing strategy options are available to the airline? In addition, what relationship between the two markets limits the airlines ability to raise price. Suggest any strategies that can help overcome this relationship?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
elucidate the effects of such expectations on the following variables today: output (Y), nominal interest rate (i), exchange rate (E), investment (I) and trade balance
Holding supply conditions constant, the costs of regulation fall wholly on producers when: a. EP = 1 b. EP => 1 c. EP = d. EP = 0 22. A 100% markup on cost is equivalent to a
Find aggregate output (Y) and the rate of interest (i) in this economy. Is the government's budget balanced, in surplus or deficit? If full-employment output is 830 and the Fe
Clarke's workers are highly skilled artisans with a great deal of job mobility. What impact would the wage increase have upon the firm's employment.
Assume that the United States trades exclusively with Mexico and that the exchange rate between the U.S. and the Mexico is flexible. Assume that Americans desire more goods th
For a child i living in a particular school district, let voucheri be a dummy variable equal to one if a child is selected to participate in a school voucher program, and let
Elucidate what the Justice Department argued that the merger would lessen competition and raise prices of business software. Is there an economic argument that the merger mi
Imagine a community with only one insurance company that provides coverage to everyone in that community (a universal/single pay or insurer). Currently, the payer does not pay