Air transportation is a very high fixed-cost business. In such a business, volume is important. The unit price minus unit variable cost (unit contribution) is high. An airline must have a high volume of passengers to cover the high fixed costs. Operating below break-even volume results in an airline losing lots of money quickly. Operating above break-even volume results in an airline making lots of money quickly. This is why the airlines can have lots of sales promotions and discounts—they had rather have a passenger in a seat making some unit contribution than have that seat be empty and produce no unit contribution. In this type of business, a company varies its pricing to produce the volume it needs. The text discusses dynamic pricing—charging different prices depending on