Back in the dark ages (1980s)there was an active secondary market in airline tickets. Now, due to security concerns, passengers are required to show identification twice before boarding a plane. Once at check- in and once clearing security. Why didn't airlines oppose the extra costs of having to check identification?
A)checking identification does not affect marginal costs
B)airlines are as concerned about security as the government
C)identification provides information for the airlines
D)requiring identification prohibits arbitrage

Question

Quizplus · Accepted Answer

Requiring identification prohibits arbitrage, which means it prevents the resale of tickets at different prices than those set by the airlines. This helps airlines maintain control over their pricing and revenue, which is why they did not oppose the extra costs associated with checking identification.

Back in the Dark Ages (1980s)there Was an Active Secondary