Question
5. Law of Demand Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Quantity Demanded
5. Law of Demand
Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston:
| Price | Quantity Demanded by Business Travelers | Quantity Demanded by Vacationers |
|---|---|---|
| (Dollars) | (Tickets) | (Tickets) |
| 150 | 2,100 | 1,000 |
| 200 | 2,000 | 800 |
| 250 | 1,900 | 600 |
| 300 | 1,800 | 400 |
As the price of tickets rises from $200 to $250, the price elasticity of demand for business travelers is ? , and the price elasticity of demand for vacationers is ? , using the midpoint method. Therefore, the demand for airline tickets in this price range is ?elastic for vacationers because business travelers are ? sensitive to changes in price.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
