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For April 2021, the actual cost per ASM (available seat mile) for Southwest Airlines was approximately 12.30. This as our best estimate of marginal cost, and assuming the price elasticity of demand is -3.5, find the profit maximizing air fare for Southwest Airline.
A. |
$16.5. |
|
B. |
$17.22 |
|
C. |
$26.5. |
|
D. |
$35.5. |
|
E. |
$45.5. |
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