As applied to airlines, yield management pricing needs to carefully evaluate the tradeoff of additional revenues from low-priced seats that would otherwise be vacant with the
A) potential loss in revenues if the low-priced seats could be sold at full fare.
B) drop in the number of flights per day from a given airport.
C) drop in customer service associated with a high volume of customers.
D) added costs of filling otherwise vacant seats.

Question

Quizplus · Accepted Answer

Yield management pricing in airlines involves adjusting prices to maximize revenue. Selling low-priced seats that might otherwise be vacant can indeed generate additional revenue, but there's a risk: if those seats could have been sold at full fare to late-booking passengers, the airline might lose potential revenue. This tradeoff is crucial in yield management strategies. Choices B, C, and D do not directly relate to the core concern of yield management, which is optimizing revenue through pricing strategies based on demand forecasting.

As Applied to Airlines, Yield Management Pricing Needs to Carefully