The Price of an Airline Ticket Rises as the Amount

question 145

Multiple Choice

The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that

• A) consumers are not aware of airline prices.
• B) consumer demand is unrelated to prices.
• C) consumer demand becomes more elastic as departure time approaches.
• D) consumer demand becomes more inelastic as departure time approaches.

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Definitions:

Premium Price

Pricing goods or services higher than the market average to reflect their perceived extra value or quality.

Revenue Driver

Key factors or activities that significantly influence or contribute to the generation of income for a business.

Presales Costs

Expenses incurred during the preliminary phase of a sales process, such as market research, product development, and pitch preparation, before actual sales begin.

Cost Of Goods Sold

The immediate expenses linked to the creation of products sold by a business, such as materials and labor.