Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Business Travelers Qds Vacationers Qds $150 2,100 tickets 1,000 tickets $200 2,000 800 $250 1,900 600 $300 1,800 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for i) business travelers and ii) vacationers? (Use the midpoint method in your calculations.) Why might vacationers have a different elasticity from business travelers?
Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Business Travelers Qds Vacationers Qds $150 2,100 tickets 1,000 tickets $200 2,000 800 $250 1,900 600 $300 1,800 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for i) business travelers and ii) vacationers? (Use the midpoint method in your calculations.) Why might vacationers have a different elasticity from business travelers?
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
Problem 12CQ: Jills Sausage Dog Stand projects the following demand for Jills sausage dogs: a. Calculate the price...
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Suppose that business travelers and vacationers have the following
|
Business Travelers Qds |
Vacationers Qds |
$150 |
2,100 tickets |
1,000 tickets |
$200 |
2,000 |
800 |
$250 |
1,900 |
600 |
$300 |
1,800 |
400 |
As the price of tickets rises from $200 to $250, what is the price elasticity of demand for i) business travelers and ii) vacationers? (Use the midpoint method in your calculations.) Why might vacationers have a different elasticity from business travelers?
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