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What prices will the airline charge of the three

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Suppose an airline flying on the New York - Chicago route has estimated the demand curves for three different types of customers: business (no advance purchase), leisure (7 day advance puchase), and discount (14 day advance purchase) travellers. They are: Business: P = 600 - Q and MR = 600 - 2Q Leisure: P = 500 - 2Q and MR = 500 - 4Q; Discount: P = 400 - 3Q and MR = 400 - 6Q. Assume there is only a one class of service, hence the marginal cost of providing the service is equal for all customers and is $200. What prices will the airline charge to each of the three different segments of customers.

Reference no: EM132559031

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