Because demand for air travel from people who are traveling on vacation is more ________, the airlines offer leisure travelers lower prices than business travelers.

Question

Quizplus · Accepted Answer

Elastic demand refers to the situation where the quantity demanded of a product or service changes significantly in response to a change in its price. Leisure travelers are more price-sensitive than business travelers, so their demand for air travel is more elastic. Therefore, the airlines offer lower prices to leisure travelers in order to attract them to their flights.

Because Demand for Air Travel from People Who Are Traveling