Ryanair sells two types of airfares, Standard and Flexi plus. There are 6000 consumers: 5000 consumers are family travelers who have higher valuations of a flight: their valuation of a Flexi plus fare is €200, and of Standard fare is €180. The other 1000 are lower valuation millennials: they value a Flexi plus fare for €160, and Standard fare for €150. Note that Flexi plus is considered better by both groups of consumers each group is willing to pay more for it than for Standard fare. Ryanair cannot directly set different prices for the same fare for different consumers but can set a - separate price for each fare. Find the maximal revenue of the airline. Note, if a consumer is indifferent between buying and not, you can assume that the consumer buys.

Ryanair sells two types of airfares, Standard and Flexi plus. There are 6000 consumers: 5000 consumers are family travelers who have higher valuations of a flight: their valuation of a Flexi plus fare is €200, and of Standard fare is €180. The other 1000 are lower valuation millennials: they value a Flexi plus fare for €160, and Standard fare for €150. Note that Flexi plus is considered better by both groups of consumers each group is willing to pay more for it than for Standard fare. Ryanair cannot directly set different prices for the same fare for different consumers but can set a - separate price for each fare. Find the maximal revenue of the airline. Note, if a consumer is indifferent between buying and not, you can assume that the consumer buys.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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