AirFrance is analysing its flight pricing between Paris and London. Over years of flying the route, AirFrance deduced that the daily demand curve for the tickets on this route is given by P = 2400 - 10Q, where Q is the number of tickets and P is price per ticket. Assume that AirFrance marginal cost for each passenger it flies is $200. Answer the below questions by clearly explaining your answer.

(a) In order to maximise profits, how many tickets show AirFrance offer for sale each day? What price should they charge per ticket and how much profit they make?

(b) Suppose that the marketing team at AirFrance realise that they have 2 categories of customers namely business and economy travellers. They estimate that the daily demand from business travelers is PB = 4000 - 50QB and the daily demand from economy travelers is PE=2000-12.5QE.

Assume Airfrance believes that it is worth to differentiate these distinct group of customers and market them separately. Assume they are able to prevent business travelers from buying economy ticket and vice versa.

AirFrance acknowledge that it will be costly to maintain this differentiation. What is the most AirFrance could pay on a daily basis to maintain this differentation?