Exhibit 9.14

-Refer to Exhibit 9.14,which shows the activity of a price-discriminating monopolist that divides its customers into two segments based on price elasticity of demand.Disregarding the actual price shown,which panel is likely to represent business travel?

Question

Exhibit 9.14
 
-Refer to Exhibit 9.14,which shows the activity of a price-discriminating monopolist that divides its customers into two segments based on price elasticity of demand.Disregarding the actual price shown,which panel is likely to represent business travel?

Quizplus · Accepted Answer

Panel A is likely to represent business travel because business travelers tend to have a more inelastic demand compared to leisure travelers. They are less sensitive to price changes, as their travel is often necessary and not easily substituted, leading to a steeper demand curve as depicted in Panel A.

Exhibit 9.14 -Refer to Exhibit 9.14,which Shows the Activity of a Price-Discriminating