An Article in the Wall Street Journal Noted the Following

question 55

Multiple Choice

An article in the Wall Street Journal noted the following: Instead of relying on a full-coach, round-trip unrestricted fare of about $2,000 between Cleveland and Los Angeles ...Continental [Airlines] since June has offered a $716 unrestricted fare in that market ....Through October, the test resulted in about the same revenue that Continental thinks it would have collected with its higher fare.
Source: Scott McCartney, "Airlines Try Cutting Business Fares, Find They Don't Lose Revenue," Wall Street Journal, November 22, 2002.
What is the absolute value of the price elasticity of demand on this airline route?

• A)0
• B)less than 1
• C)greater than 1
• D)approximately 1

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Definitions:

Smoothing

A financial or operational strategy used to stabilize results by reducing fluctuations in data or performance over a period.

Problem Solving

The process of identifying a problem, determining the best solution among alternatives, and implementing that solution effectively.

Conflict Resolution

The processes and strategies used to address and resolve disputes or disagreements between parties in a constructive manner.

Negotiating

The process of discussing and reaching an agreement between two or more parties with conflicting interests, aiming for a mutually acceptable solution.