Asked by Jasdeep Singh on Jul 04, 2024
Verified
Buy Airline Tickets over the Weekend
A recent study by economists Steven Puller and Lisa Taylor found that airline tickets purchased over the weekend were priced 5% lower on average.Why would airlines charge lower prices to customers making bookings on the weekend?
Weekend Booking
Refers to the reservation made for services or accommodations on weekends, often seen in the travel and hospitality industry.
Economists
Professionals who study the production, distribution, and consumption of goods and services, focusing on how economies work and how economic agents interact.
- Understand the implications of a decreasing demand curve.
- Discriminate between the techniques used in direct and indirect price discrimination.
Verified Answer
MH
MUHAMMAD HAFIZ ISKANDAR ZULKARNAINJul 11, 2024
Final Answer :
This is a price discrimination scheme.Weekday bookings tend to be for business travel and weekend bookings tend to be for tourist travel.Tourists tend to be more flexible in their travel plans and so are more elastic customers.The weekend price is a way to offer them discounts while reducing the risk of arbitrage from the business customers.
Learning Objectives
- Understand the implications of a decreasing demand curve.
- Discriminate between the techniques used in direct and indirect price discrimination.
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