What price will generate a daily demand of 70 slots for each of the periods?Hi everyone!
I've been given a homework question I'm finding really tough, any help would be much appreciated!
Sydtown Airport Corporation (SAC) is concerned about increased flight traffic congestion at the airport. An external consultantís report suggests that the airport is more likely to experience significant congestion between October and June than at any other time of the year. Based on estimates, demand is Qd1= 450 - 0.2P , where Qd1 is quantity demanded for runway timeslots between October and June. Demand during the remaining months of the year is Qd2 = 218.75 - 0.125P , where Qd2 is quantity demanded for runway timeslots between July and September. SAC incurs an additional cost of $950 each time one of the many different airlines utilises the runway, provided 70 or fewer airplanes use the runway on a given day. When more than 70 airplanes use the airport runway, the additional cost incurred by SAC is $5 billion (the cost of building an additional runway and terminal). SAC currently charges airlines a fixed fee of $1,412.50 each time the runway is utilised.
Devise a pricing plan that would enhance SACís profitability.
Again, I would so, so appreciated a hand with this question.