The strategy of airlines bumping low-price vacation passengers from overfilled flights and selling full-price tickets to last-minute business travelers is an example of perfect price elasticity.

Question

Quizplus · Accepted Answer

This strategy is an example of price discrimination, not perfect price elasticity. Price discrimination involves charging different prices to different customers for the same product or service, based on their willingness to pay, while perfect price elasticity would mean that any change in price results in an infinite change in the quantity demanded, which is not the case here.

The Strategy of Airlines Bumping Low-Price Vacation Passengers from Overfilled