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Business, 24.03.2020 03:34 bella4269

Lydia owns a railroad company in Belgium and acts as a monopolist. Each train has two types of seats on its trains: business class and economy class. All of the customers prefer business class seats to economy class seats; however, price-sensitive people choose to buy the economy seats. Lydia is able to buy seat cushions that she could install in economy class that would increase the economy class consumers' willingness to pay for economy class by more than the cost of installing the cushions. What will happen to Lydia's profits when she installs the cushions? Choose only one.1. Lydia will increase her profits by installing the cushions2. Lydia will decrease her profits by installing the cushions3. Lydia's profits will be unchanged by installing the cushions4. The answer is ambiguous

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