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Question: You are watching a television news show. A consumer advocate is discussing the airline industry. He says, "There are so many rates offered by airlines that it is technically possible for a 747 to be carrying a full load of passengers where no two of them paid the same price for their tickets. This is clearly unfair and inefficient." He continues, "In addition, the profits of the airlines have doubled in the last few years since they began this practice, and these additional profits are clearly a social burden. We need legislation that requires airlines to change all passengers on an airplane the same price for their travel"

Is the increase in profits generated by this type of price discrimination a social cost? Explain.

Microeconomics, Economics

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