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Airlines Price Discrimination

Category: Economics

Describe ways in which airlines practice price discrimination. Why do they use these strategies? Defend your answers with reference to economic theory.

Your answer should include:

• An explanation of why price discrimination is possible in the market for air travel
• An explanation of why it is desirable for airlines (with some discussion of the nature of costs and revenues in the airline industry)
• Examples of strategies, identifying the ‘type’ or ‘degree’ of price discrimination being practiced.
Note:
*Provide examples
*Provide Graphs