Airlines providing flights from hong kong to shanghai

2003
7. Airlines providing flights from Hong Kong to Shanghai and from Shenzhen to Shanghai charge
very different fares. The planes, services and distances are comparable, but fares are very different.
However, there are fewer airlines providing flights from Hong Kong to Shanghai than from
Shenzhen to Shanghai.
(a) Flying from Hong Kong to Shanghai commands a much higher airfare than from Shenzhen to
Shanghai. Is this price discrimination? Is yes, why? If not, why is there a large price discrepancy?
(5 marks)
Answers:
2005
6. Huang Shan is a famous mountain attracting many visitors every year. Nearly all visitors reach the
peak of the mountain by riding cable cars. During weekdays a fee of RMB 80 per person is charged.
During holidays the crowd is so large that it usually takes several hours waiting in line before a
visitor can get on the cable car. Under the operation of the local government, the following dual-fee
scheme is adopted on holidays. For visitors willing to pay RMB 120 per person (RMB 40 more),
they can go to a separate waiting room with a much shorter queue. All visitors will reach the peak
the same day, but because the capacity of cable cars is fixed, those paying the lower fee of RMB 80
will be pushed further back to wait longer. There has been no riot. Assume all visitors knew about
this dual-fee pricing and perfectly anticipated their waiting time in advance.
6

(c) Is the dual-fee scheme a case of price discrimination? Explain (3 marks)
2008
7. Large shopping centres everywhere tend to charge much lower rents for anchor stores, or stores
considered as big draws attracting visitors or shoppers to the centres, than ordinary retailers.
(a) Fixed rents per square foot charged to anchor stores are often only small fractions of the fixed
rents charged to smaller shops not noted for their drawing powers. Assume the rental spaces are all
identical; do these sharply varying rents represent price discrimination? Explain in what sense it is
price discrimination and in what sense it is not.