Suppose that business travelers and vacationers have the following demand for airline tickets from Penang to Kuala Lumpur: Price (RM) Quantity Demanded (business travelers) Quantity Demanded (vacationers) 150 2100 1000 200 2000 800 250 1900 600 300 1800 400 As the price of tickets rises from RM200 to RM250, what is the price elasticity of demand for (a) business travelers and (b) vacationers? (Use the midpoint approach in your calculations and you are required to list out every step of your calculations)
AirAsia Berhad is the largest airline in Malaysia by fleet size and destinations. AirAsia
Group operates scheduled domestic and international flights to more than 165 destinations
spanning 25 countries. AirAsia airlines always being known for its’ low-cost flight tickets,
hence makes them as one of the most favor airlines among the Malaysians. Nonetheless, since the COVID-19 virus hits the world, AirAsia Berhad’s flight business has been seriously
affected and the share
Assume the world has been recovered from the virus. AirAsia is planning to come out
with a brand new package to attract more customers to travel with their airlines so to boost their business and share price. Assume you are one of the employees working in AirAsia and your department are being informed to design a travelling package for both business travelers and vacationers. Your manager understands that both business travelers and vacationers have their own preference while booking for their flight ticket especially on the price. Thus, your manager would like to know how sensitive business travelers and vacationers are to the price of the ticket. You are asked to analyze the price sensitivity of business travelers and vacationers by using the method of price elasticity of
Suppose that business travelers and vacationers have the following demand for airline
tickets from Penang to Kuala Lumpur:
| Price (RM) | Quantity Demanded (business travelers) |
Quantity Demanded (vacationers) |
| 150 | 2100 | 1000 |
| 200 | 2000 | 800 |
| 250 | 1900 | 600 |
| 300 | 1800 | 400 |
As the price of tickets rises from RM200 to RM250, what is the price elasticity of demand for (a) business travelers and (b) vacationers? (Use the midpoint approach in your calculations
and you are required to list out every step of your calculations)
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