The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that
A) consumers are not aware of airline prices.
B) consumer demand is unrelated to prices.
C) consumer demand becomes more elastic as departure time approaches.
D) consumer demand becomes more inelastic as departure time approaches.

Question

Quizplus · Accepted Answer

As the departure time approaches, consumers have fewer alternatives and are more likely to need to travel, making their demand more inelastic. This allows airlines to charge higher prices.

The Price of an Airline Ticket Rises as the Amount