The price elasticity of demand for airplane travel one year in advance of the departure date is most likely to be
A)negative.
B)equal to zero.
C)between zero and 1.
D)equal to 1.
E)greater than 1.

Question

Quizplus · Accepted Answer

The price elasticity of demand for airplane travel one year in advance of the departure date is likely to be highly elastic, meaning that a change in price will result in a proportionally greater change in quantity demanded. This is because consumers have more flexibility in their travel plans for the future, and can easily substitute another mode of transportation or delay their travel altogether in response to a price increase. Therefore, the expected price elasticity is greater than 1.

The Price Elasticity of Demand for Airplane Travel One Year