The link between load factor and pricing is illustrated by

Question

Quizplus · Accepted Answer

The marginal cost principle states that the price of a service should be set equal to the additional cost of providing one more unit of service. As load factor increases, the marginal cost of providing one more unit of service decreases. Therefore, airlines can lower their prices to increase demand and fill up empty seats without incurring additional costs. This link between load factor and pricing is captured by the marginal cost principle.

The Link Between Load Factor and Pricing Is Illustrated by