Answer:
10) c. $40,000
11) a. $15,000
12) All of the above are correct.
Explanation:
we are given:
Total seats available = 150
100 business traveller are willing to pay $600 per ticket
50 business traveller are willing to pay $300 per ticket
Cost of airline of providing flight = $20,000
10)
when the airline sell the ticket at $600, only business traveller will be willing to pay for the ticket
Total business traveller = 100
Total money incurred by selling the tickets = $(600 x 100 )
= $60,000
Cost of providing flight = $20,000
profit generated = $( 60,000 - 20,000)
= $ 40,000
Therefore, the profit generated is $40,000
11)
charging each customer their willingness to pay relative to charging a flat price of $600 per ticket
first 100 customers will be business traaveller they will buy the tickets at the flat price of $600, after that the company will sell it's ticket to the vacationer at a price lower than the flat price by maximum price the vaccationer is willing to pay i.e $300
So net extra profit in this case will be (300 x 50 ) = $15,000
12)
It must be remembered that the main aim of price discrimination is to increase the total revenue and hopefully the profits of the supplier.
So the monopolist will always try to maximize the profit
