With Higher Fuel Costs, Airlines Raise Their Average Fare from $0.50

Multiple Choice

With higher fuel costs, airlines raise their average fare from $0.50 to $1.50 per passenger kilometre and the number of passenger kilometres decreases from 2.5 million a day to 1.5 million a day. Over this price range, the price elasticity of demand is

A) 2.
B) 0.18.
C) 5.6.
D) 50.
E) 0.5.