10, whereas the low-type consumer values it according to V(s) = 60s – s². Q11. If the airline could distinguish and separate the two types, what ticket price and quality level would it choose for an economy seat? (a) (PL, 8L) = (600, 20) (b) (PL, 8L) = (725, 15) (c) (PL, 8L) = (800, 20) (d) (PL, 8L) = (675, 15) (e) (PL, SL) = (875, 25) "/>
Extracted text: PROBLEM IV. Suppose that an airline offers two types of tickets to France: economy, with price p, and quality sL, and first class, with price PH and quality SH. It costs the airline 30s per flight to provide a seat of quality s. There are two types of consumer, high-type and low-type. The high-type consumer values quality according to V" (s) = 40s – s? for s < 10="" and="" v"="" (s)="120s" –="" s?="" for="" s=""> 10, whereas the low-type consumer values it according to V(s) = 60s – s². Q11. If the airline could distinguish and separate the two types, what ticket price and quality level would it choose for an economy seat? (a) (PL, 8L) = (600, 20) (b) (PL, 8L) = (725, 15) (c) (PL, 8L) = (800, 20) (d) (PL, 8L) = (675, 15) (e) (PL, SL) = (875, 25)