Suppose that business travelers and vacationers have the following demand for airline tickets from New York to
Question:
a. As the price of tickets rises from $200 to $250, what is the price elasticity of demand for
(i) Business travelers and
(ii) Vacationers? (Use the midpoint method in your calculations.)
b. Why might vacationers have a different elasticity from businesstravelers?
Transcribed Image Text:
Quantity Demanded (business travelers) Quantity Demanded (vacationers) Price $150 200 250 300 2,100 tickets 2,000 1,900 1,800 1,000 tickets 800 600 400
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a For business travelers the price elasticity of demand when the p...View the full answer
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