The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-Airlines can increase profits by charging higher fares to business customers because those customers have a more elastic demand for airline travel.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-Airlines can increase profits by charging higher fares to business customers because those customers have a more elastic demand for airline travel.

Quizplus · Accepted Answer

Business customers typically have a more inelastic demand for airline travel because their travel is often necessary and not as price-sensitive as leisure travelers, allowing airlines to charge higher fares without significantly reducing demand.

The Figure Given Below Shows the Cost and Revenue Curves