Question
What is the profit-maximizing pricing policy if the business traveler is willing to pay $1000 to fly from New York City to Miami on an
What is the profit-maximizing pricing policy if the business traveler is willing to pay $1000 to fly from New York City to Miami on an unrestricted ticket and $450 for a ticket with a two-week minimum stay, and the vacation traveler is willing to pay $250 a for ticket with a two-week minimum stay and $650 for an unrestricted ticket? Again, the marginal cost of both tickets is $100. (Hint: note that the airline has plenty of tickets to sell, with or without restrictions. Is it possible the airline just sells unrestricted tickets or restricted tickets in this case?)
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