Obviously my point was very much black and white and in what is known as a 'perfect' economy.
Your point is very much valid also and goes to show that there are tens of different factors involved however, EK offer the same A380 on LHR and MAN routes yet fares are higher from MAN...
There is also the "we charge what we can" aspect .....
prices aren't set by working out the cost and then adding a percentage .. the market is also looked at and once your costs are covered you price according to what you think the market will cough up.
Many years ago heard a wonderful radio interview with a Ford Motor Co. exec getting lambasted as to why the same car in the rest of europe cost less than in the UK.
Interviewer had been building up to the interview for some time and going on about digging into and getting answers etc...
His response was, we charge what we think the market will pay .. if we get it wrong we don't sell enough cars. We're in business to make as much profit as we can.
Sort of blew the rest of the interview out the window....