7. As the pandemic has waned the demand for airline ticketshas increased. If the price elasticity of demand for air travel was 3.22 before the pandemic the following is most likely now true: Demand has shifted to the right, become more steeply sloped and the airlines can charge higher prices, for a while, as long at the price elasticity of demand is now less than 1.00.Quantity demanded has shifted to the right, the demand curve has become flatter, and the airlines should lower prices into the inelastic range of the demand curve.Airlines that previously would have been wise to leave prices unchanged are now smart to lower prices since demand has shifted to the left and become more flatlysloped.Airlines should have lowered prices before the pandemic and should raise them dramatically at this point, with no regard to the price elasticity of demand.A and D only.

The measurement of change in the quantity required of a good owing to changes in the determinants of…

Answered: As the pandemic has waned the demand…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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7. As the pandemic has waned the demand for airline ticketshas increased. If the price elasticity of demand for air travel was 3.22 before the pandemic the following is most likely now true:

Demand has shifted to the right, become more steeply sloped and the airlines can charge higher prices, for a while, as long at the price elasticity of demand is now less than 1.00.
Quantity demanded has shifted to the right, the demand curve has become flatter, and the airlines should lower prices into the inelastic range of the demand curve.
Airlines that previously would have been wise to leave prices unchanged are now smart to lower prices since demand has shifted to the left and become more flatlysloped.
Airlines should have lowered prices before the pandemic and should raise them dramatically at this point, with no regard to the price elasticity of demand.
A and D only.

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