Airlines operates a plane with 20 first-class seats and 100 coach-class seats. During December, on a given flight there are 20 business travelers and 80 vacation travelers. Sloan cannot tell which is which when they purchase tickets. Each type of traveler's maximum willingness to pay is given by:
First Class Coach Class
Business $1,300 $500
Vacation $400 $250
Assume all costs are sunk.
Is the following, true, false, or do you need more information? Airlines should charge $1,300 for a first class ticket