If the Price Elasticity of Demand for Airline Tickets Is

question 46

Multiple Choice

If the price elasticity of demand for airline tickets is 3.0 for a vacation traveler and 0.4 for a business traveler, then a monopolist interested in price discrimination would charge

• A) a higher price for the business traveler and a lower price for the vacation traveler.
• B) a lower price for the business traveler and a higher price for the vacation traveler.
• C) the same price for the vacation traveler and the business traveler.
• D) a less profitable price for the business traveler than for the vacation traveler.