question archive An airline practices third-degree price discrimination
Subject:EconomicsPrice:2.87 Bought7
An airline practices third-degree price discrimination. Each month, it sells 1,500 business-class tickets from London to Paris at $200 a ticket, and 6,000 economy-class tickets at $80 a ticket. Use this information to construct the demand curves of business travelers and tourists respectively, if it is given that the demand curves for both groups are linear and that the marginal cost of a ticket is constant at $50.
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