Consider a 20 Percent Increase in the Price of a 2

Multiple Choice

Consider a 20 percent increase in the price of a 2 pound bag of sugar and a 20 percent increase in the price of first- class airline travel. In response to the price changes, which of the following is most likely to be true?

A) The total revenue from first- class airline travel will not change.
B) The percentage change in the quantity demanded for a 2 pound bag of sugar will be larger than the percentage change in the quantity demanded for first- class airline travel.
C) Because first- class airline travel is a luxury good, the quantity demanded will not change with the 20 percent increase in price.
D) The percentage change in the quantity demanded for first- class airline travel will be larger than the percentage change in the quantity demanded for a 2 pound bag of sugar.