Question
The market for air travel is characterized by a few
major airlines that often engage in price wars and promotional offers to attract customers. However, during peak travel seasons or for specific routes with limited competition, airlines tend to raise prices significantly. Which of the following best explains the pricing behavior of airlines in this scenario?Solution
Airlines practice price discrimination by charging different prices to different customer segments based on their willingness to pay. During peak seasons or on less competitive routes, the demand for air travel is relatively inelastic, allowing airlines to charge higher prices. Conversely, during off-peak seasons or on highly competitive routes, the demand is more elastic, leading to price wars and discounts.
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Puccinia is a parasitic:
