Airline Mogul Forum
Airline Mogul => General Chat => Topic started by: iranair777 on January 07, 2008, 01:03:42 pm
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Why is it when we are increasing the price after flying the same route for a long time, do you stay with a loadfactor of 100%, but the profit goes down?? the profits suppose to go up because we are increasing the price, not go down :evil:
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why no reply?
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Well picture how much money Microsoft would make if Windows cost $1000000000000000000000000000000000. Nobody would buy it. Essentially, when you have a monopoly on the route, you want to charge the price where margin demand = marginal cost. Your ideal level of profit comes when you can raise the price to the highest level possible while still keeping your plane full.
Take a course on it if you're in high school or do some basic economics courses if you're done school. Learning about pricing structures is interesting.
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Why is it when we are increasing the price after flying the same route for a long time, do you stay with a loadfactor of 100%, but the profit goes down?? the profits suppose to go up because we are increasing the price, not go down :evil:
Costs up. Fuel, for instance.
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Why is it when we are increasing the price after flying the same route for a long time, do you stay with a loadfactor of 100%, but the profit goes down?? the profits suppose to go up because we are increasing the price, not go down :evil:
Costs up. Fuel, for instance.
i dont think you got my point
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Why is it when we are increasing the price after flying the same route for a long time, do you stay with a loadfactor of 100%, but the profit goes down?? the profits suppose to go up because we are increasing the price, not go down :evil:
Costs up. Fuel, for instance.
i dont think you got my point
i altered where the "peak" is for food/drink, which may erode into the new profits a little.