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 leisure 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 leisure travel?

Quizplus · Accepted Answer

Panel B represents leisure travel because it has a more elastic demand curve, indicating that customers are more responsive to changes in price. Leisure travelers are more likely to have flexible schedules and can adjust their travel plans based on price fluctuations, making their demand more elastic. In contrast, Panel A represents business travel, which typically has a less elastic demand curve as it is more time-sensitive and necessary for the operations of the business.

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