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b. Business-class airline fares that are 150 percent higher than economy-class fares (Recognize that two business-class seats take the same space inside the plane as
b. Business-class airline fares that are 150 percent higher than economy-class fares (Recognize that two business-class seats take the same space inside the plane as three economy-class seats.) Price discrimination O A. is likely to be taking place because the business-class seats take up more space inside the plane. O B. may or may not be taking place. Price discrimination may not be taking place because the use of additional space could justify the price difference, though space may not be the only factor in the price. Price discrimination may be included in business-class fares, reflecting the greater willingness to pay extra on the part of those having business expense accounts. O C. is not likely to be taking place because consumers value the cost of business-class seats the same as the cost of economy-class seats and the airline is selling a tangible good rather than a service. O D. may or may not be taking place. Price discrimination may be taking place because the use of additional space could justify the price difference. Alternatively, price discrimination may not be taking place because the airline values business customers higher than other customers
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