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  3. (a)Air tickets usually fall into three classes: top class, business class, and

(a)Air tickets usually fall into three classes: top class, business class, and

游客2025-06-21  2
问题  (a)Air tickets usually fall into three classes: top class, business class, and economy class. What is the economic rationale for this phenomenon?
(b)What is price discrimination? Are there any necessary requirements for successful price discrimination? Please give two more examples to explain your answer.
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答案 (a)Business people or rich people or those who need to fly for urgent things will not care too much about prices. However, travelers or poorer people would switch to alternative transportation means if air tickets were very expensive. In order to maximize profit, airlines usually divide people into different groups according to their price elasticity of demand and charge them differently.
(b)Price discrimination means that monopoly could charge different price for the same goods or service for different people. This may occur when the monopolist can divide the market into two or more segments each independent of the other.
The essential requirements for successful price discrimination are:
Two or more separate markets-really sub-sections of the one market.
No arbitrage between markets-i.e. buying in one market and selling in the other.
Different elasticities in each market.
Other examples: In China, students can take a train by paying half the ticket price on their winter and summer vacations. Foreigners pay more to visit the Palace Museum in Beijing than local people.
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