Math 138: Airline ticket price increase vs. profit increase/decrease...?

Question

full question:
As the price of a ticket increases, the airline collects more money from each passenger. Why, then, does the profit for the airline decreas after ticket prices reach a certain level??

*should have something to do with the quadratic function maybe...

Answer 1

If you charge more money, profit will not decrease. It can only increase.

However, the amount people are willing to pay changes.

This is how places like Priceline operate. If I told you I'd sell you an airline ticket from LA to New York, and it would be $100, would you buy it? Maybe you'd say yes. But, you would have been willing to pay $300.

Now let's say the price is $400. You won't pay.

So, as the price increases, profit increases. When the price goes even higher, the # of people willing to pay the higher price decreases, and thus profit will start to go down.

Regards,

Mysstere

Answer 2

Airline tickets can change by the minute. Entitled to the same price? No. The price is what it is. You can try contacting the airline to see if they will honor the same price. They may honor it especially if the credit card error was their mistake. I wouldn't wait too long to do this though. It sounds like you are purchasing tickets for the holidays. These ticket prices just go up and up.