Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Quantity Demanded by Business Travelers Quantity Demanded by Vacationers (Dollars) (Tickets) (Tickets) 150 2,100 1,000 200 2,000 800 250 1,900 600 300 1,800 400 As the price of tickets rises from $250 to $300, the price elasticity of demand for business travelers is __________ (0.30, 0.45, 2.20, 1), and the price elasticity of demand for vacationers is __________ (0.30, 0.45, 2.20, 1), using the midpoint method. Therefore, the demand for airline tickets in this price range is __________ (more , less) elastic for vacationers because business travelers are ___________ (less, more) sensitive to changes in price.
Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Quantity Demanded by Business Travelers Quantity Demanded by Vacationers (Dollars) (Tickets) (Tickets) 150 2,100 1,000 200 2,000 800 250 1,900 600 300 1,800 400 As the price of tickets rises from $250 to $300, the price elasticity of demand for business travelers is __________ (0.30, 0.45, 2.20, 1), and the price elasticity of demand for vacationers is __________ (0.30, 0.45, 2.20, 1), using the midpoint method. Therefore, the demand for airline tickets in this price range is __________ (more , less) elastic for vacationers because business travelers are ___________ (less, more) sensitive to changes in price.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 2PA
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Question
Suppose that business travelers and vacationers have the following
|
Quantity Demanded by Business Travelers
|
Quantity Demanded by Vacationers
|
---|---|---|
(Dollars)
|
(Tickets)
|
(Tickets)
|
150 | 2,100 | 1,000 |
200 | 2,000 | 800 |
250 | 1,900 | 600 |
300 | 1,800 | 400 |
As the price of tickets rises from $250 to $300, the price
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