Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: PriceBusiness Travelers QdsVacationers Qds$1502,100 tickets1,000 tickets$2002,000 800$2501,900 600$3001,800 400 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?

Given table is: The price elasticity of demand is the responsiveness of quantity change due to a…

Answered: Suppose that business travelers and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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?

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