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1.Suppose that business travelers and vacationers have the following demand for airline tickets from Chicago to Miami: PriceQty Demanded (business travelers)Qty Demanded (vacationers) $1502,100 tickets1,000

1.Suppose that business travelers and vacationers have the following demand for airline tickets from Chicago to Miami:

PriceQty Demanded (business travelers)Qty Demanded (vacationers)

$1502,100 tickets1,000 tickets

200 2,000800

250 1,900600

300 1,800400

a. As the price of tickets rises from $200 to $3250, 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 and business travelers have different elasticities?

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