Delta Airlines price discriminates by charging lower prices to vacation travelers than to business travelers. This pricing strategy reflects the fact that vacation travelers' _____ air travel is _____ than that of business travelers.
A)demand for; more sensitive to price
B)demand for; less sensitive to price
C)supply of; more sensitive to price
D)supply of; less sensitive to price

Question

Quizplus · Accepted Answer

Vacation travelers are more price-sensitive than business travelers because they are usually paying for their own travel expenses and are more likely to have flexibility in their travel plans. Business travelers, on the other hand, often have less flexibility and are more willing to pay higher prices for the convenience of traveling on specific dates and times. Therefore, Delta Airlines charges lower prices to vacation travelers to attract their business and fill seats during off-peak times when demand is lower.

Delta Airlines Price Discriminates by Charging Lower Prices to Vacation