Quote:
Originally Posted by corporatejay
You have established that you are willing to pay $550 to go to vegas, so any smart business person will tell you to charge $550
If there was no tax, Westjet could charge you $550 and pocket $550.
If there's a $150 tax, in order to pocket $550, they have to charge you $700. But you haven't established you're willing to pay $700 to go to vegas.
To ensure you go to vegas, they will have you pay $550, $150 goes as a tax and Westjet only pockets $400, $150 less than they would pocket if there was no tax.....see how they are losing out on revenue.
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Of course I can see they may not be maximizing revenue but, so what? I don't care. They play by the rules of the game. WestJet isn't crying about it and neither are their customers.
They're not ENTITLED to maximize revenue, they have to determine pricing based on all the factors in play.
Why is the Flames opportunity cost an issue to anyone except the Flames?
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