In 2017, major U.S. airlines started to offer tickets with a lower level of service for a lower price. Someone buying one of these tickets cannot store her carry-on bag in overhead storage, is in the last group to board, and has a seat assigned at the gate. Many airlines call this service “Basic Economy.” News reports about this new class of airline ticket were often critical of the airlines, but how do you think an economist might view the airlines’ new strategy?