Multiple Choice
Suppose the short-run price elasticity of demand for airline travel is 0.50, while its long- run elasticity is 2.50. This means that for 100 short-notice travelers compared to 100travelers who book well in advance, a significant increase in airline fares now will causeairlines to
A) collect less revenue from the short-notice travelers than from the travelers who book well in advance
B) gain travelers who book well in advance but lose short-notice travelers
C) lose more revenue from short-notice travelers than from travelers who book well in advance
D) collect less revenue from the travelers who book well in advance than from the short- notice travelers
E) lose more short-notice travelers than travelers who book well in advance
Correct Answer:
Verified
Correct Answer:
Verified
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