Price discrimination by airline

Reference no: EM1315348

Assume an airline flying on the Charlotile - Chicago route has estimated the demand curves for three different types of customers: business (no advance purchase), leisure (7 day advance purchase), and discount (14 day advance purchase) travellers. They are: Business: P = 600-Q and P=400-3Q and MR = 400-6Q. Assume there is only one class of service, hence the marginal cost of providing the service is equal for all customers and is $200. What price will the airline charge to each of the three different segments of customers?

Reference no: EM1315348

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