Scenario 15-5 An Airline Knows That There Are Two Types of Travelers

question 256

Multiple Choice

Scenario 15-5
An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
-Refer to Scenario 15-5. How much profit will the airline earn if it engages in price discrimination?

• A)-$5,000
• B)$40,000
• C)$55,000
• D)$75,000

---

Definitions:

Panic Disorder

Disorder in which panic attacks occur more than once or repeatedly and cause persistent worry or changes in behavior.

Bipolar Disorder

A psychological disorder characterized by significant fluctuations in mood, ranging from manic or hypomanic episodes to depressive states.

Psychoanalysis

A set of theories and therapeutic techniques related to the study of the unconscious mind, developed by Sigmund Freud, which seeks to treat mental disorders.

Theoretical Background

The collection of concepts, models, and theories that form the foundation and framework for understanding a particular area of study or research.