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Suppose the market for air travel has 100 "high type" consumers and 100 "low type" consumers. High types are willing to pay $300 for low quality tickets and $800 for high quality tickets, whereas low types are willing to pay $200 for low quality tickets and $400 for high quality tickets. Assume the market is supplied by a single firm, and the marginal cost of providing both high and low quality plane tickets is 0. What should be the price for high quality tickets if the firm is engaging in optimal second degree price discrimination
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Suppose the market for air travel has 100 "high type" consumers and 100 "low type" consumers. High t...
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