Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris

Exercise 6

Sometimes when reservation requests by deep discount travelers are refused, demanders take their business elsewhere; they "balk." At other times, such demanders negotiate and can be "sold up" to higher fare service like United's EconomyPlus. If United experiences fewer customers balking when reservation requests for the cheapest seats are refused, should they allocate preexisting capacity to protect fewer seats (or more) for late-arriving full-fare passengers