4. Suppose that at a price of $400 per ticket, 300 tick- ets are demanded to fly from Montreal to Vancouver. Now the price rises to $600, and 280 tickets are de- manded. (a) Assuming the demand for tickets is linear, what is the slope of the demand curve? (b) Find the price elasticities at the quantity-price pairs (300, 400) and (280, 600). (c) What should the airline company do if it wants to increase revenue?
4. Suppose that at a price of $400 per ticket, 300 tick- ets are demanded to fly from Montreal to Vancouver. Now the price rises to $600, and 280 tickets are de- manded. (a) Assuming the demand for tickets is linear, what is the slope of the demand curve? (b) Find the price elasticities at the quantity-price pairs (300, 400) and (280, 600). (c) What should the airline company do if it wants to increase revenue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![4. Suppose that at a price of $400 per ticket, 300 tick-
ets are demanded to fly from Montreal to Vancouver.
Now the price rises to $600, and 280 tickets are de-
manded.
(a) Assuming the demand for tickets is linear, what
is the slope of the demand curve?
(b) Find the price elasticities at the quantity-price
pairs (300, 400) and (280, 600).
(c) What should the airline company do if it wants
to increase revenue?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e5d34f5-205d-48c5-83c7-8ff76b50a2d5%2Fee60c7a6-7bad-4ed6-b691-6169b4f6fabe%2F9jiuqmj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Suppose that at a price of $400 per ticket, 300 tick-
ets are demanded to fly from Montreal to Vancouver.
Now the price rises to $600, and 280 tickets are de-
manded.
(a) Assuming the demand for tickets is linear, what
is the slope of the demand curve?
(b) Find the price elasticities at the quantity-price
pairs (300, 400) and (280, 600).
(c) What should the airline company do if it wants
to increase revenue?
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