Question

Space Spider Airline is the only airline in Spiderland. The airline has two major groups of...

Space Spider Airline is the only airline in Spiderland. The airline has two major groups of passengers – business travelers and vacation travelers. One group of them has its price elasticity of demand at -1.8 and another group has -3.0 respectively. a. Which group, business travelers or vacation travelers, is more likely having its price elasticity of demand at -3.0? Briefly explain your answer. b. Which traveler group will be charged a higher fare by Space Spider Airline under price discrimination? Suggest THREE practical ways for Space Spider Airline to identify this group of passengers. Explain your answers briefly.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Space Spider Airline is the only airline in Spiderland. The airline has two major groups of...
Space Spider Airline is the only airline in Spiderland. The airline has two major groups of passengers – business travelers and vacation travelers. One group of them has its price elasticity of demand at -1.8 and another group has -3.0 respectively. a. Which group, business travelers or vacation travelers, is more likely having its price elasticity of demand at -3.0? Briefly explain your answer. b. Which traveler group will be charged a higher fare by Space Spider Airline under price...
Airline passengers are broadly segmented by purpose of travel. Characterize the two major segments by price...
Airline passengers are broadly segmented by purpose of travel. Characterize the two major segments by price elasticity of demand. Use price elasticity of demand to explain how prices are set for each segment.
A monopoly that sells coconuts to two groups of consumers in different parts of an island....
A monopoly that sells coconuts to two groups of consumers in different parts of an island. Group 1’s elasticity of demand is 3.5, while group 2’s is -2.9. Your marginal cost of producing the product is $70. © a. What is the best type of price discrimination this firm can engage in? Why? b. Without calculation, the price charged to which group would be the higher price? Why? c. Calculate the prices that should be charged to the 2 groups.
A monopoly that sells coconuts to two groups of consumers in different parts of an island....
A monopoly that sells coconuts to two groups of consumers in different parts of an island. Group 1’s elasticity of demand is 3.5, while group 2’s is -2.9. Your marginal cost of producing the product is $70. © a. What is the best type of price discrimination this firm can engage in? Why? (3.5pts) b. Without calculation, the price charged to which group would be the higher price? Why? (3.5pts) c. Calculate the prices that should be charged to the...
You are the manager of a monopoly that sells a product to two groups of consumers...
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -3, while group 2’s is -2. Your marginal cost of producing the product is $70. a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2:...
You are the manager of a monopoly that sells a product to two groups of consumers...
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -5, while group 2’s is -6. Your marginal cost of producing the product is $20. a. Determine your optimal markups and prices under third-degree price discrimination.   Instructions: Enter your responses rounded to two decimal places. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2:...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. Themonopolist’s marginal cost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold.The demand curves are !    Adults: PA = 25 – 1/6 × QA = 25 – 0.1667 × QA !    Seniors:        PS = 15 – c × QS = 15 – 0.125 ×...
Melissa has a company that produces T-shirts for charities. Her market consists of two groups, Ceria...
Melissa has a company that produces T-shirts for charities. Her market consists of two groups, Ceria Orphanage (C), and Jaya Orphanage (J). Their individual demand equations are as follows: C: P = 40 – 2.00Qc J: P = 55 – 1.25QJ Where Q = represents quantity demanded (in hundreds), and P = price per T-shirt 1. If Melissa charges $30 per T-shirt, what is the quantity demanded by each group and by the market as a whole? 2. At the...
Charter Airline Operating Decisions Firm-specific demand in the scheduled airline industry is segmented by customer class...
Charter Airline Operating Decisions Firm-specific demand in the scheduled airline industry is segmented by customer class and is highly uncertain so that an order may not realize revenue and a unit sale. Airlines respond to this dynamic, highly competitive environment by tracking reservations at preannounced fares and reassigning capacity to the various market segments (“buckets”) as business travelers, vacationers, and convention groups book the flights above or below expected levels several days and even weeks before scheduled departure. This systems...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs     Fuel $14,000     Snacks and drinks 800     Landing fees...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT