The Price Elasticity of Demand for Business Air Travel Is

question 114

Multiple Choice

The price elasticity of demand for business air travel is .80 and the price elasticity of demand for leisure air travel is 1.60.Therefore,the demand for leisure air travel

• A) is less elastic than the demand for business travel.
• B) is inelastic.
• C) is more elastic than the demand for business travel.
• D) is unrelated to consumers' incomes.

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Definitions:

Experience Curve Effects

Experience curve effects refer to the reduction in per-unit production costs that occur over time due to increased efficiency, learning, and improvements in technology.

Profitability

A financial metric measuring the degree to which a company or activity generates income greater than its costs, typically expressed as a percentage of revenue.

Experience Curve

A concept that suggests costs decline over time as a result of gained experience and increased efficiency.

Pricing Strategy

A plan or approach a company uses to set the prices for its products or services, aiming to balance competitiveness with profitability.