If the Price Elasticity of Demand for Airline Tickets Is

question 140

Multiple Choice

If the price elasticity of demand for airline tickets is 2.0 for a leisure traveler and 0.5 for a business traveler, then a price-discriminating monopolist would charge

• A) a higher price for the business traveler than the leisure traveler.
• B) the same price for both travelers.
• C) a lower price for the business traveler than the leisure traveler.
• D) a less profitable price for the business traveler than the leisure traveler.

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Definitions:

Notes Receivable

Written promises for amounts to be received in the future, typically with interest, classified as assets on a balance sheet.

Calculating Interest

The process of determining the amount of interest to be added to the principal sum of a loan or deposit.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including both the principal and any final interest payments.

Issued Note

A financial instrument representing a promise to pay a specified amount of money at a future date.