ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question 9
(11.7). An airline has been collecting data to estimate demand for flights between Greenville,
South Carolina, and Seattle, for which it would be the only provider. It has estimated this
demand to be p = 1,000 - 2q. The total cost (in dollars) of this flight is TC(q) =50,000+20q.
If the airline cannot discriminate, what price does it charge, how many tickets does it sell, and
what is its' profit?
Ⓒq-205, p-$310, profit-$125,600
q=245, p-$510, profit-$70,050
Ⓒq-245, p-$310, profit=$70,050
Ⓒq-205. p-$510, profit-$125,600
In addition to that, If the airline can do first-
degree price discrimination (based on
information it receives through its partners
during online booking), how many tickets
does it sell, and what is its profit?
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Transcribed Image Text:Question 9 (11.7). An airline has been collecting data to estimate demand for flights between Greenville, South Carolina, and Seattle, for which it would be the only provider. It has estimated this demand to be p = 1,000 - 2q. The total cost (in dollars) of this flight is TC(q) =50,000+20q. If the airline cannot discriminate, what price does it charge, how many tickets does it sell, and what is its' profit? Ⓒq-205, p-$310, profit-$125,600 q=245, p-$510, profit-$70,050 Ⓒq-245, p-$310, profit=$70,050 Ⓒq-205. p-$510, profit-$125,600 In addition to that, If the airline can do first- degree price discrimination (based on information it receives through its partners during online booking), how many tickets does it sell, and what is its profit?
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