Hi there, please try with these questions , refer to the screenshots as well, thanks

These are the questions related to the airline industry,

1. Are airlines monopoly or duopoly? For example the UA airlines in USA.
2. What are the self selection constraints in the airline industry.( look at the attachments)
3. What type of price discrimination does the airline industry does? For example the second degree price discrimination?
4. What prices fences did the airlines did not manage to keep based from this screenshot, the answer is in the screenshot, how did the consumer leakage happen because there is hidden city ticketing so there must be one or more price fencing the airlines did not manage to keep.

• Explain the economic reasons for the existence of this type of tickets and briefly comment on how the covid pandemic would have affected your results.

m One of the most important managerial decisions is to set prices for goods or services A common goal of price-setting is maximizing profits The control that firms have over their prices depends on market structure Market Characteristics Perfect Competition Monopolistic Oligopoly Monopoly Competition Number and size of Very large number Large number of Small number of One firms of relatively small relatively small relatively large firms firms firms Type of product Standardized Differentiated Standardized or Unique differentiated Market Entry Very easy Easy Difficult Very difficult or impossible Market power None Low to high Low to high High Long-Run None None Low to high High Economic Profits The more choice is available to the consumers, the lower the firm's pricing power. Example (1) . Airlines attach a number of conditions ("fences") to the purchase of discounted items. . The goal is to prevent high-yield business passengers from purchasing discounted tickets aimed at leisure passengers (consumer leakage). Non-flexibility PRICE Non-refundability PER SEAT > Internet-booking only 1" Class > Off-peak departure times Full Fare Economy (No Restrictions) Saturday night stay 1-Week Advance Purchase 1-Week Advance Purchase, Saturday Night Stayover Advance purchase restrictions 3.Week Advance Purchase, Saturday Night Stayover Maximum stay 3-Week Advance Purchase, Saturday Night Stayover, $100 for changes Specified flights, book on Internet, no changes/ refunds All coupons used Late Sales through > Flights used in correct sequence Consolidators / Internet, no refunds Capacity of 1" NO. OF SEATS DEMANDED Capacity of Aircraft Class Cabin " Dark areas denote amount of consumer surplus (goal of segmented pricing is to reduce this)Typology of fences Category Segmentation Base Fence Customer Characteristics Age/Status Checking ID Group Minimum number grouped Business or individual Identifiable contract Size of business Minimum size of business Spend amount/budget Minimum amount/budget requirement Loyalty Minimum purchase times Frequency Minimum frequencies requirement Purchase Pattern Time Purchase or reservation made before certain date Location/Channel Different information or purchase procedure Method of Payment Changing penalty or time-consuming activities Product Characteristics Product usage Minimum, specified usage, or particular schedule (peak charges) Alteration charge Charge for flexibility, refund penalty, changing penalty Transaction time/cost Prolonged time or increased complexity in transaction Service option Availability of salesperson, low speed or non-priority delivery Information Disguised information, anonymity Price fencing in the practice of revenue management: An overview and taxonomy. Journal of Revenue and Pricing Management Vol. 11, 2, 146-159Self-selection constraints In order to maximize profits: The cheap version should not attract high-end buyers (incentive constraint) The cheap version must be cheap enough that low-end buyers purchase (participation constraint)Charging different prices for the same (or similar) product )9 Lack of a signicant cost difference between product versions Three conditions: - The firm must have market power - Identify segments of demand with different price sensitivity - No possibility of arbitrage or consumer leakage (market sealing) The segment with highest price sensitivity receives lower price