Suppose that business travelers and vacationers havethe following demand for airline tickets from Chicagoto Miami:PriceQuantity Demanded(business travelers)Quantity Demanded(vacationers)$150 2,100 tickets 1,000 tickets200 2,000 800250 1,900 600300 1,800 400a. 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.)b. Why might vacationers and business travelershave different elasticities?
Suppose that business travelers and vacationers havethe following demand for airline tickets from Chicagoto Miami:PriceQuantity Demanded(business travelers)Quantity Demanded(vacationers)$150 2,100 tickets 1,000 tickets200 2,000 800250 1,900 600300 1,800 400a. 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.)b. Why might vacationers and business travelershave different elasticities?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Suppose that business travelers and vacationers have
the following
to Miami:
Price
Quantity Demanded
(business travelers)
Quantity Demanded
(vacationers)
$150 2,100 tickets 1,000 tickets
200 2,000 800
250 1,900 600
300 1,800 400
a. As the price of tickets rises from $200 to $250,
what is the price
(i) business travelers and (ii) vacationers?
(Use the midpoint method in your calculations.)
b. Why might vacationers and business travelers
have different elasticities?
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