Airlines that engage in price discrimination charge lower prices to vacation 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

When airlines engage in price discrimination, they charge lower prices to vacation travelers because their demand is more elastic than that of other travelers, such as business travelers. This means that vacation travelers are more sensitive to price changes and would be more likely to choose a different airline or mode of transportation if the price is too high. Business travelers, on the other hand, are more likely to have a less elastic demand and may be willing to pay higher prices for the convenience and reliability of air travel.

Airlines That Engage in Price Discrimination Charge Lower Prices to Vacation