Airlines that engage in price discrimination charge higher prices to business travelers because their _____ is more _____ than that of other travelers.
A)demand;elastic
B)demand;inelastic
C)supply;elastic
D)supply;inelastic

Question

Quizplus · Accepted Answer

Price discrimination is based on the concept of charging different prices to different consumers for the same product or service. Business travelers often have a more inelastic demand for air travel because they need to travel regardless of the price and are less sensitive to price changes. Therefore, airlines charge them higher prices compared to other travelers with a more elastic demand.

Airlines That Engage in Price Discrimination Charge Higher Prices to Business