Air Americe is about to introduce a daily round-trip flight from New York to Los Angeles. Air Americe offers only one class of seatsComfort Classand is in the process of determining how it should price its round-trip tickes The market research group at Air Americe segments the market into business and pleasure travelers. It provides the following information on the effect of two different prices on the estimated number of seats sold and the variable costs per ticket. Type of Traveler Business | VC of Food & Contribution Number of Commission Margin per Seats on Each Price Expected Ticket Charged to be Sold $80 420 200 $180 1,820 190 $80 420 100 $180 1,820 20 Price Charged $500 $2.000 $500 $2,000 Operating Income Pleasure | Assume these prices are the only choices available to Air Americe. The market research team offers one additional fact. Pleasure travelers start their travel during one week, spend at least one weekend at their destination, and return the following week or thereafter. Business travelers usually start and complete their travel within the same week. They do not stayover weekends. Assume that the round-trip fuel costs are fixed costs of $24.000 regardless of the actual number of passengers on a flight and that fixed costs allocated to the round-trip flight for airplane lease costs, ground services (maintenance, check-in, and baggage handling), and flight crew salaries total $188,000. REQUIRED (Answer all questions in each part): 1. If you could charge different prices to business travelers and pleasure travelers, would you? What is the contribution margin per traveler, per fare? What is the total revenue per type of traveler, per fare? Show your computations (formulas) in the table above. Are any of the fixed costs relevant to this decision? Why or why not? At which price point does Air Americo maximize contribution margin for each type of traveler? 2. Explain the key factors that affects your answer in Requirement 1 above, a minimum of three are required. (Hints: Consider the price sensitivity of each traveler, who pays for the fare, are there other possible alternatives to travel, etc.?) 3. How might Air Americo implement price discrimination? That is, what plan could the airline formulate so that business travelers and pleasure travelers each pay the price desired by the airline? Is price discrimination legal for this company? Why or why not