The Short-Run Price Elasticity of Demand for Airline Travel Is

question 32

Multiple Choice

The short-run price elasticity of demand for airline travel is .05, while the long-run elasticity is 2.36. This means that a significant increase in airline ticket prices will cause airline companies to:

• A) collect less revenue from short-notice travelers.
• B) collect more revenue from travelers who book well in advance.
• C) lose money on short-notice travelers.
• D) collect less revenue from travelers who book well in advance.
• E) lose many of its short-notice travelers.