At the beginning of 2012, a U.S. Department of Transportation regulation requiring airlines to include all mandatory
Question:
At the beginning of 2012, a U.S. Department of Transportation regulation requiring airlines to include all mandatory taxes and fees in published airfares went into effect. Prior to this “full-fare advertising” rule, airlines were allowed to advertise tickets without disclosing these taxes and fees, resulting in advertised fares which could be less than half the actual price that was paid. Legislation proposed in the FAA Reauthorization Act of 2018 would rescind this full-fare advertising rule, again allowing airlines to initially quote low ticket prices, while disclosing mandatory taxes and fees separately before payment is required. How might the rescinding of this rule affect the demand for airline tickets? Explain if this rule would make these airline taxes and fees more salient or less salient for consumers? What are some other charges airlines impose that are not usually disclosed in published airfares, and how do they impact price salience for air travel?
Step by Step Answer:
Mylab Economics With Pearson Access Code For Principles Of Microeconomics
ISBN: 9780135197141,9780135197103
13th Edition
Authors: Karl E. Case; Ray C. Fair; Sharon E. Oster