Table 1 and Table 2 show the price and income elasticities of demand respectively for selected air travel markets. Table 1: Estimated Price Elasticities of Passenger Demand Route/Market level National level Supra-national level Short-haul Long-haul Intra N America Short-haul Long-haul 0.9 -0.8 Intra Europe -0.7 -1.2 -0.6 -1.1 Intra Asia -0.9 -0.8 -0.8 -0.8 Intra Sub-Saharan Africa -0.6 -0.6 -0.5 -0.5 Intra S America -0.4 -0.4 -1.1 Trans-Atlantic -1.0 0.8 -0.8 -1.1 Trans-Pacific -1.0 -0.8 -0.7 -0.5 -0.5 Europe-Asia -0.4 -0.4 -0.8 -0.7 -0.6 Source: IATA -0.5 Table 2: Estimated Income Elasticities of Passenger Demand Route / Market level Short-haul Medium-haul US Long-haul 1.8 Very long-haul 1.9 Developed economies 2.0 1.5 2.2 1.6 Developing economies 1.7 2.0 2.4 2.0 2.2 National level 2.7 Short-haul Medium-haul US Long-haul 1.6 Very long-haul 1.7 Developed economies 1.8 1.3 2.0 1.4 1.5 Developing economies 2.2 1.8 1.8 2.0 2.5 Source: IATA a) Using the information presented in the above tables, explain how the concepts of price and income elasticity of demand can assist airline managers to increase revenues of their business and maximize profits. (25 Marks)