In this question, I ask you to consider the market for flights from Seattle to Fresno (California). Alaska Airlines have a monopoly on this route. There are two types of travelers. Leisure travelers derive a value of $200 from flying this route if the itinerary includes a Saturday night stay, and $175 if the itinerary doesn't include a Saturday night stay. Business travelers derive a value of $100 from flying this route if the itinerary includes a Saturday night stay, and $450 if the itinerary doesn't include a Saturday night stay.

1. What prices do you suggest that Alaska charge for itineraries that include a Saturday night stay, and those that do not include a Saturday night stay? How might business travelers respond to the pricing strategy you suggest in part (a)?