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Price adjustment policies are designed to influence shoppers

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Price adjustment policies are designed to influence shoppers and essentially prevent the market from reaching equilibrium. For example, the airline industry routinely accepted more reservations than seats available, and until the late 1970s followed the first-come, first-served policy. In other words, passengers were allowed to board the airplane on a first-come, first-served basis. This policy was replaced with a policy to compensate volunteers with cash or free tickets for giving up their seats on overbooked flights. In this assignment, you will explore the pros and cons of both policies from an economic perspective.;Do you believe that compensating volunteers for relinquishing their seats on overbooked flights is more efficient than a policy of first-come, first-served? Why or why not? Argue from an economic perspective, making specific references to this week?s readings.

 

Paper#31027 | Written in 18-Jul-2015

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