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Business, 24.04.2020 11:23 nightangel175

2. Duck Airlines charges all passengers the same $400 fare on its routes. The average flight carries 60 passengers in a plane with a capacity of 100. One-third of the passengers are business travelers and two-thirds are leisure travelers. A bright , young economist tells the airline that it should engage in price discrimination. She estimates that if it increases the business fares by 10%, it will lose 5% of the business passengers, and if it reduces leisure fares by 10% it will increase leisure travelers by 20%. Calculate the total revenue of Duck Airlines under it's current one-price plan and under the price discrimination plan.

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