Please answer d. and e. Individuals differ in their willingness to pay for air travel, and airlines would like to charge different prices to differentindividuals based on their willingness to pay. Airlines typically attempt to divide passengers into two types: leisure travelers andbusiness travelers. Suppose that an airline is charging $400 per ticket for all passengers on flights between New York andWashington D.C. The accompanying tables provide information on quantity demanded for air travel for leisure travelers andbusiness travelers.Price(per ticket)$400$500Quantity-leisure travelers(tickets per flight)10050a. What is the absolute value of price elasticity for leisuretravelers if the airline increases the price to $500? Roundyour answer to the nearest whole number.b. What is the change in total revenue for leisure travelerswhen the price increases to $500?c. What is the absolute value of price elasticity for businesstravelers if the airline increases the price to $500? Roundyour answer to the hundredths place.d. What is the change in total revenue for business travelerswhen the price increases to $500?Price(per ticket)$400$500315000.47Quantity-business travelers(tickets per flight)10090 e. To maximize total revenue, the airline should charge$500 to both groups.$400 to leisure travelers and $500 to businesstravelers.$400 to both groups.$500 to leisure travelers and $400 to businesstravelers.

The aggregate monetary value obtained by a firm within a designated timeframe through the sale of…

Answered: d. What is the change in total revenue…

Business

Economics

d. What is the change in total revenue for business travelers when the price increases to $500? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: did you get 0.2Y?

A: The aggregate expenditure is the sum total of consumption, investment, government expenditures.

Q: The table shows a private open economy. All figures are in billions of dollars. Real GDP C+ lg Net…

A: The real GDP refers to the total goods and services produced in an economy in a given fiscal…

Q: Shades and Tints

A: A tint is a colour mixed with white to increase lightness, whereas a shade is a colour mixed with…

Q: Use the following figure to answer the question: What is the consumer surplus in this market when…

A: Demand curve is the downward-sloping curve. Supply curve is the upward-sloping curve. Equilibrium is…

Q: When can a business owner is earning a profit but not covering expenses?

A: In a perfectly competitive industry, it is possible for a firm to earn loss or positive profits in…

Q: Tutorial

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first…

Q: Use image

A: The spending function represents the relationship between household spending and total income. When…

Q: What is the role of the procurement or negotiations professional?

A: To work out a deal, negotiations professionals play a crucial role and they are much critical in…

Q: Can you solvie it step by step. Manually

A: Engineering economics entails a methodical analysis of the financial advantages of suggested…

Q: dccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc…

A: Your question is not visible.

Q: Alex is injured and rushed to Care Hospitals for treatment. He spent 64 minutes at the hospital out…

A: The objective of the question is to calculate the service cycle efficiency for Alex's visit to the…

Q: Use fos S egjuilib The

A: In the free market, equilibrium price and quantity is determined by the forces of the demand and…

Q: What are some common examples of expenses?

A: To generate revenue, the business organizes many activities. The cost of doing these activities are…

Q: what is mode of entry meaning?

A: Mode of entry refers to different channels through which a business can enter the international…

Q: what is continous and discrete payments?

A: Discretely compounded interest is calculated and added to the principal at specific intervals (e.g.,…

Q: Identify 3 home related tasks and explain how demanding each one is

A: Home-related tasks are one of the most underrated and fall under unpaid and therefore unacknowledged…

Q: HOW TO DRAW A TABLE FORM

A: There are 4 possible ways in which the other player can act :- 1) always choose ‘C’ 2) He will…

Q: usefulness of e-money and versus digital cash.

A: Firstly the barter system was used for buying and selling of goods in which goods were exchanged for…

Q: how do you calculate customer's life time value?

A: In this world of tough competition customers are acquired and lost over the firm’s lifetime, but a…

Q: Discretionary and Essential Expenses

A: Expenses of the firms are the major and most important part of a business firm or a company. The…

Q: How is the Purchasing power important?

A: Answer - Purchasing Power - Purchasing power is overall buying capacity of country which is…

Q: evune focus

A: Economics refers to the social science that studies the production, distribution, and consumption of…

Q: What important informations are required in evaluations?

A: Evaluation can be understood as a systematic and objective assessment of an ongoing or completed…

Q: please check the calculations. i think they are wrong

A: Net cash flow is actually profitability ratio which indicates the profits in a specific period of…

Q: Sara has health insurance with a $2,000 annual deductible, a $3,000 stop loss provision and 80/20…

A: Insurance refers to a type of financial product intended to shield people and businesses from the…

Q: What is the Excel method?

A: Excel is a computer spreadsheet program that consist of rows and columns. Excel is used to store…

Q: Offer, acceptance, and consideration are necessary elements of A.a warranty B.a…

Q: was the article located or you want me to pase the text for you

A: Disclaimer: I can certainly help you identify the key components of the article without requiring…

Q: Differentiate between MDGs and SDG

A: SDGs stands for the Sustainable Development Goals. It began in 2012 at the UN Conference on…

Q: I cannot understand anything written on this paper, would you please be able to type it?

A: This graph is actually showing the relationship between real exchange rate and nominal exchange rate…

Question

Please answer d. and e.

Individuals differ in their willingness to pay for air travel, and airlines would like to charge different prices to different
individuals based on their willingness to pay. Airlines typically attempt to divide passengers into two types: leisure travelers and
business travelers. Suppose that an airline is charging $400 per ticket for all passengers on flights between New York and
Washington D.C. The accompanying tables provide information on quantity demanded for air travel for leisure travelers and
business travelers.
Price
(per ticket)
$400
$500
Quantity-leisure travelers
(tickets per flight)
100
50
a. What is the absolute value of price elasticity for leisure
travelers if the airline increases the price to $500? Round
your answer to the nearest whole number.
b. What is the change in total revenue for leisure travelers
when the price increases to $500?
c. What is the absolute value of price elasticity for business
travelers if the airline increases the price to $500? Round
your answer to the hundredths place.
d. What is the change in total revenue for business travelers
when the price increases to $500?
Price
(per ticket)
$400
$500
3
15000
.47
Quantity-business travelers
(tickets per flight)
100
90

e. To maximize total revenue, the airline should charge
$500 to both groups.
$400 to leisure travelers and $500 to business
travelers.
$400 to both groups.
$500 to leisure travelers and $400 to business
travelers.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Total Revenue

VIEW

Step 2: Find the change in TR for business travelers when price increases.

VIEW

Step 3: Choose the correct pricing to maximize TR.

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Outline and explain the guidelines for ensuring e-invitations are successful.
What sort of people are likely to have limited computer and Internet access?
Could you answer parts D-F please?
please do d and e now please
Legal and Ethical Behavior in the Philippines
Evaluate safety and security affecting early childhood development in Jamaica. Use references.
How to imorove quality education in the Philippines
Mode definition
What analytical procedures would you undertake to reach a decision?
Your printed name and hand- written signature O Beginning O Closing O Middle
High quality information gruarantees that every decisions made will be a successful one that benefits the organization
What is tally mark