Question 21 of 50 This question: 1 point(s) possible Online travel agencies drop ticket booking fees Online airline ticket agents have dropped the $7 booking fee and expedia.com and priceline.com have also dropped the $50 cancelation fee. Expedia.com reports that its ticket sales have increased by double-digits. Source: USA Today, June 3, 2009 What is the difference between the price of a flight and the value of a flight? The price of a flight is _____. The value of a flight is _____. A. the marginal benefit of the flight; the marginal cost of a flight B. what you pay for the flight; the marginal benefit of the flight C. always falling; always rising D. the marginal cost of a flight; the marginal benefit of the flight E. the marginal benefit of the flight; what you pay for the flight
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Text A: What advantage does a seller have in offering a '$50-off coupon' or a '$50 rebate'? Why not just lower the price by $50? Which is best for the seller of a laptop, a concert ticket, or a couch? Text B: Why is there a curtain separating first-class and coach-class seating compartments on airplanes? Cite research. Text C: Can you use price discrimination strategies in your business or other endeavors? Describe.
Akash M.
An airline has 100 seats to sell on a plane traveling from New York to Los Angeles. It sells its tickets for $\$ 450$ each. At this price, 97 tickets are sold. Just as the plane is about to take off, a person without a ticket says he is willing to pay 150 dollar, but not one penny more, to buy a ticket on the plane. The additional cost of the additional passenger (to the airline)- that is, the marginal cost to the airline-is 100 dollar.Is it in the best interest of the airline to sell the person a ticket for 150 dollar? Explain your answer.
Anjali K.
People differ in their willingness to pay for air travel, and airlines would like to try and charge different prices to different people. Airlines typically attempt to divide passengers into two types: leisure travelers and business travelers. Suppose that an airline is charging $400 per ticket for all passengers on flights between New York and Washington, D.C. Furthermore, suppose it is known that leisure travelers demand 100 tickets per flight at the price of $400 per ticket and 50 tickets per flight at a price of $500 per ticket, while business travelers demand 100 tickets per flight at a price of $400 per ticket and 90 tickets per flight at a price of $500 per ticket. a) Using the midpoint method, calculate and describe the price elasticity of demand for both types of passengers if the airline raises their ticket price to $500. b) Calculate the change in total revenue from each group. c) Interpret the values you have calculated - are these values consistent with what you would have expected to see, given the context of this problem? Explain why or why not.
Shu N.
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