M
Michael Predit
Guest
Alta Airlines faces the following demand for airline tickets: Q = 220,000 – 100P.
Assume Alta wants to maximize revenue. What price and quantity should Alta set for its tickets (assume it can only charge one price). What is the company’s maximum revenue?
Now suppose that Alta can segment its market into the following two groups: Group A has demand function: Qa =100,000 – 20Pa. Group B has demand function Qb = 120,000 – 80Pb. Calculate the price and quantity Alta should sell in each market. Calculate the maximum revenue Alta can achieve overall if it combines the revenue from each market.
Assume Alta wants to maximize revenue. What price and quantity should Alta set for its tickets (assume it can only charge one price). What is the company’s maximum revenue?
Now suppose that Alta can segment its market into the following two groups: Group A has demand function: Qa =100,000 – 20Pa. Group B has demand function Qb = 120,000 – 80Pb. Calculate the price and quantity Alta should sell in each market. Calculate the maximum revenue Alta can achieve overall if it combines the revenue from each market.