Suppose an airline sells air tickets to two types of customer – business travelers and vacation travelers. Their estimated demand elasticities are -2.5 and -4.0 respectively. Suppose the marginal cost is constant at $240, and the services provided to the two types of customer are similar.  Calculate the fares the airline should charge on the air tickets sold to the respective types of customers. Show your calculations.

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Q: None

A: Referencehttps://kfknowledgebank.kaplan.co.uk/acca/chapter-4-pricing

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