In January 2014 Qantas raised fuel surcharges on flights to Europe, parts of Asia and the Middle East. The fare rises varied by passenger class. The price for a oneway economy ticket to destinations...

In January 2014 Qantas raised fuel surcharges on flights to Europe, parts of Asia and the Middle East. The fare rises varied by passenger class. The price for a oneway economy ticket to destinations in Europe and North Africa was increased by $15 to $270 (6 per cent), the fare for premium economy increased by $30 to $355 (9 per cent), and business and first-class travellers had fare rises of $50 to $495 (11 per cent) (O’Sullivan 2014). Explain why Qantas (as a profit-maximising firm with market power) would choose to increase the price more for first-class passengers than for economy passengers when there is an increase in its costs.