Erin and Deidre, two residents of Ithaca, New York, are planning a trip to Boston.Erin, the sales manager for a large retailer, has to attend a business meeting.Deidre, a college student on vacation, is planning a leisurely trip to visit friends and relatives.Which of the following statements is true?
A)An airline that price discriminates will most likely charge Erin a higher price.
B)An airline that price discriminates will most likely charge Deidre a higher price.
C)Since there is no difference in the cost of producing air travel, airlines will not charge different prices to Erin and Deidre.
D)An airline cannot price discriminate because buyers can resell their tickets through the Internet.

Question

Quizplus · Accepted Answer

Airlines often price discriminate based on the purpose of travel. Business travelers like Erin are less price-sensitive and often book closer to the departure date, leading to higher prices compared to leisure travelers like Deidre.

Erin and Deidre, Two Residents of Ithaca, New York, Are