Most Airline Frequent Flyer Programs Reward the Most Frequent Flyers

question 25

Multiple Choice

Most airline frequent flyer programs reward the most frequent flyers with business class upgrades and flight lounge privileges.Airlines are using these rewards as a means of implementing _____ segmentation.

• A) lifestyle
• B) motive
• C) usage-rate
• D) demographic
• E) personality

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Definitions:

MR = MC Rule

The principle that a firm will maximize its profit (or minimize its losses) by producing the output at which marginal revenue and marginal cost are equal, provided product price is equal to or greater than average variable cost.

Pure Competition

Refers to a market structure where many sellers offer homogeneous products, and no single seller can influence the market price.

Total Revenue Curve

A graphical representation that shows how a firm’s total revenue changes with variations in the quantity of output sold.