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?

Q: 1.

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