Chapter 56 Question ○49

Why is the round-trip airfare from Kansas to Orlando cheaper than the round-trip airfare from Orlando to Kansas? (Karen Hertel) If you live in Kansas City, Missouri, and want to fly to Orlando, Florida on December 15, 2006, and return a week later, the cheapest round trip you can find on Experdia.com The fare is two hundred and forty dollars.But let's say you live in Orlando and want to fly to Kansas City on the same date, the cheapest round-trip fare is $312.For the above two routes, the passenger's plane consumes the same amount of fuel and enjoys the same flight service.Why are the ticket prices different?

If you're flying from Kansas City to Orlando, chances are you're going on vacation.You can choose to go to many different places like Hawaii, Barbados or Cancun and so on.With so many destinations for vacationers to choose from, airlines must compete fiercely for such business.Since larger planes cost less to fly, airlines have good reason to use lower fares to fill empty seats on planes by targeting more price-conscious customers, known as vacationers. But if you're flying from Orlando to Kansas City, chances are you're traveling for business or for family reasons.You have no other destination to choose from.Buyers with few options are less price sensitive.As a result, travelers departing from Orlando are willing to pay more for airfare.

The following examples discuss external conditions that incentivize sellers to offer free or reduced-price merchandise (or promotional items).