Airline Price Discrimination – Third-Degree Pricing

Capacity: 440 seats total

Marginal Cost: $100 per ticket

Business Demand: P = 1,400 − 4Q

Leisure Demand: P = 600 − 1.4Q

For each segment, derive MR (twice as steep as demand). Set MR = MC and solve for Q. Then read the price off the demand curve.

Business Tickets Sold

0440

Leisure Tickets Sold

0440

⚠️ Combined tickets cannot exceed aircraft capacity of 440 seats. Leisure quantity has been adjusted automatically.

Seats used: 440 / 440

Business Profit

—

Leisure Profit

—

Total Profit

—

Business MR: —

Leisure MR: —

Adjust quantities to see results.

📌 Insight: Select a scenario and adjust quantities to explore how price discrimination works.

✈️ Pricing Airline Tickets