You are advising Air Asia on the future strategic move to recover from the acute recession currently face by the company.

Air Asia is an airline flying a particular route that has seasonal demand. The firm's total demand is given by: Q = 600 - 4P (1)

Where Q is the number of passengers per year, in hundred thousands, and P is the fare (in $). In the peak season the demand is given by:

Q H = 320 - 1.5PH (2)

and in the off-season the demand is given by:

Q L = 280 - 2.5PL (3)

Assume that fixed costs are $6 billion per year and that marginal costs are constant at $60 per passenger. Thus the cost function is given by:

C = 6,000,000 + 60Q (4)

Where C is total costs (in $'000).

Required:

a. Calculate the profit-maximizing price and output without price discrimination,

b. Calculate the size of the profit.

c. Calculate the demand elasticities of the two segments at their profit-maximizing prices s)