Airlines have begun selling more basic economy tickets. According to a columnist in the Wall Street Journal,

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Airlines have begun selling more “basic economy” tickets. According to a columnist in the Wall Street Journal, these tickets are usually the lowest-priced seats available on a flight, but the tickets “lack advance seat assignments, typically board in the last group, often prohibit carry-on bags in overhead bins and aren’t eligible for upgrades or any kind of changes.” Many corporate travel officers block employees from buying these tickets: “Whatever savings come from paying $50 to $100 less each way could be obliterated by a business traveler missing one flight and having to buy a new ticket that costs more than $1,000.” The columnist concludes that basic economy tickets are a new means for airlines to practice price discrimination. Briefly explain his reasoning.

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Economics

ISBN: 9780135957554

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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