Airlines charge a ____________price to business travelers compared to leisure travelers because business travelers have a ____________ demand than leisure travelers.
A)Higher;more elastic
B)Higher;less elastic
C)Lower;more elastic
D)Lower;less elastic

Question

​Airlines charge a ____________price to business travelers compared to leisure travelers because business travelers have a ____________ demand than leisure travelers.
A)​Higher;more elastic
B)Higher;less elastic
C)Lower;more elastic
D)​Lower;less elastic

Quizplus · Accepted Answer

Airlines charge higher prices to business travelers because they have less elasticity of demand than leisure travelers. Business travelers are less sensitive to price changes because they usually have less flexibility in their travel plans and need to travel regardless of the price. Leisure travelers, on the other hand, have more flexibility and can choose to travel at a different time or to a different destination if the prices are too high. Therefore, airlines can charge higher prices to business travelers without losing many customers, while they need to keep prices low to attract leisure travelers.

​Airlines Charge a ____________Price to Business Travelers Compared to Leisure

Airlines Charge a ____________Price to Business Travelers Compared to Leisure