Problem 3. Air Travel Demand Elasticity (8 points) The following data were collected to show the impact of a recent price war during which all the airlines serving the Oakland/Burbank market lowered their prices. You may assume that all other factors affecting air travel demand remained unchanged. Your assignment is to calculate the implied (own-price) elasticity of demand for overall air travel between Oakland and Burbank. What is the own-price elasticity of demand? Is air travel demand between Oakland and Burbank elastic or inelastic? All numbers are measured on a per-month basis. Passengers before price war 246,555 Passengers during price war 1,053,139 Increase in passengers 806,584 Average one-way fare before price war $86.50 Average one-way fare during price war $44.69 Decrease in one-way fares -$41.81 Market revenue before price war $21,327,008 Market revenue in during price war $47,064,782 Increase in market revenue $25,737,774