Market price method of allocating scarse airline seats

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Reference no: EM13800441

On March 31, 2008, Hawaii lost 15 percent of its air service as aloha airlines and the cheap-flight airline ATA suddenly shut down. Stranded travellers were offered flights to west coast cities $1000 one way. Within a month, the fare to West Coast cities dropped to $200 a round trip. Strahded travellers complained of price gauging,

Under what conditions the $1000 fare would be considered price gauging? Under what conditions would the $1000 fare be example of the market price method of allocating scarse airline seats?

Reference no: EM13800441

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