Suppose that business travelers and vacationers have the following demand for airline tickets from Japan to Philippines. Price in (US Dollars $) Quantity Demanded for Tickets (Business Travelers) Quantity Demanded for Tickets (Vacationers) 150 2,100 1,000 200 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 elasticityof demand for: (i) business travelers? (ii) vacationers? b. Why might vacationers have a different elasticity from business travelers?
Suppose that business travelers and vacationers have the following demand for airline tickets from Japan to Philippines. Price in (US Dollars $) Quantity Demanded for Tickets (Business Travelers) Quantity Demanded for Tickets (Vacationers) 150 2,100 1,000 200 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 elasticityof demand for: (i) business travelers? (ii) vacationers? b. Why might vacationers have a different elasticity from business travelers?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Round up the answers to the nearest hundredths.
Suppose that business travelers and vacationers have the following
tickets from Japan to Philippines.
|
|
Quantity Demanded for Tickets (Business Travelers) |
Quantity Demanded for Tickets (Vacationers) |
|
150 |
2,100 |
1,000 |
|
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 elasticityof
demand for:
(i) business travelers?
(ii) vacationers?
b. Why might vacationers have a different elasticity from business travelers?
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