Some people-usually business travelers-have a very strong desire to fly to a particular city on a particular

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Some people-usually business travelers-have a very strong desire to fly to a particular city on a particular day, and airlines charge these travelers higher ticket prices than they charge other people, such as families who are planning vacations months in advance. Some people really like Big Macs, and other people only rarely eat Big Macs, preferring to eat other food for lunch on most days. Consider the following possible explanations of why airlines can charge different people different prices while McDonald's can't and briefly explain which explanation is correct.
1. In most cities, there are laws against charging different people different prices for food products.
2. Most people don't pay attention to prices when buying plane tickets, so the airlines can charge different prices without it being noticed.
3. People don't like hamburgers as much as they used to, so McDonald's has to keep cutting the prices it charges everyone.
4. People can't resell airline tickets, so people buying them at low price can't resell them at a high price. People can resell hamburgers more easily.
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Microeconomics

ISBN: 9780135952955

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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