Suppose that Airblue and AirSail have the following demand for tickets from Karachi to Islamabad during the month of Ramadan.Price Quantity Demanded(Airblue)Quantity Demanded(AirSail)Rs. 65,00 350 Tickets200 TicketsRs. 7,000 280190Rs. 11,000 200160 As the price of tickets rises from Rs. 7,000 to Rs. 11,000 due to Eid-UL-Fitr, what is the price elasticity of demand for (a) Airblue and (b) AirSail? (Use the midpoint method in your calculations.

Elasticity (Ed) = [(Q2 - Q1) / (Q2 + Q1)] / [(P2 - P1) / (P2 + P1)]

Answered: Suppose that Airblue and AirSail have…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Consumer Choice And Elasticity

Section: Chapter Questions

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Suppose that Airblue and AirSail have the following demand for tickets from Karachi to Islamabad during the month of Ramadan.

Price	Quantity Demanded (Airblue)	Quantity Demanded (AirSail)
Rs. 65,00	350 Tickets	200 Tickets
Rs. 7,000	280	190
Rs. 11,000	200	160

As the price of tickets rises from Rs. 7,000 to Rs. 11,000 due to Eid-UL-Fitr, what is the price elasticity of demand for (a) Airblue and (b) AirSail? (Use the midpoint method in your calculations.

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