Why do we only get peanuts on U.S. flights?
Background
People always complain about the lack of complimentary meals in flights. And older people always tell stories of how in the "good old days" airlines used to serve full meals for free on their flights, and they also had more leg room between seats. But, also, in the good old days airlines did not have much control over the price they charged for their flights. The U.S. government had strict regulations over the airline industry, including how much they could charge fliers. During those times it was hard for an airline to lower their prices without first getting permission from governmental authorities. So, in effect, the government used to impose a price floor on the market for air fare.
Do you think there is a relationship between the price floor and the fact that today airlines offer fewer amenities than before? Furthermore, do you think air travel is better now (with fewer amenities) than before? Again, please use the models and concepts to answer the question.