Buy Airline Tickets over the Weekend A recent study by economists Steven Puller and Lisa Taylor found that airline tickets purchased over the weekend were priced 5% lower on average. Why would airlines charge lower prices to customers making bookings on the weekend?
This is a price discrimination scheme. Weekday bookings tend to be for business travel and weekend bookings tend to be for tourist travel. Tourists tend to be more flexible in their travel plans and so are more elastic customers. The weekend price is a way to offer them discounts while reducing the risk of arbitrage from the business customers.
You might also like to view...
In new Keynesian theory, the pattern of inflation exhibited by an economy with growing aggregate demand known as inflation dynamics is
A) initially sluggish upward adjustment of the price level and inflation in response to higher aggregate demand followed by higher inflation in the future. B) initially sluggish downward adjustment of the price level and inflation in response to higher aggregate demand followed by lower inflation in the future. C) initially speedy upward adjustment of the price level and inflation in response to higher aggregate demand followed by lower inflation in the future. D) initially speedy upward adjustment of the price level and inflation in response to higher aggregate demand followed by higher inflation in the future.
As we move down a straight-line demand curve, the price elasticity becomes
A. larger. B. smaller. C. larger and then smaller. D. smaller and then larger.
The Head Start program
A. has been successful in fostering better levels of school attainment. B. began in 1965. C. provides preschool activities for 4 and 5 year old disadvantaged students. D. all of these answer options are correct.
Which of the following contributed to the increase in steamboat productivity?
(a) Improvements in ship design (b) Better docking stations (c) Increased competition by railroads (d) All of the above