Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill.All else equal, customers who arrive by public transportation to take advantage of Bubba's Hula Shack discount have a ________ for the services of the establishment than customers who drive to the establishment.
A)higher price elasticity of demand
B)lower price elasticity of demand
C)higher price elasticity of supply
D)lower price elasticity of supply

Question

Quizplus · Accepted Answer

Customers who choose to take public transportation to Bubba's Hula Shack are likely more price-sensitive and cost-conscious, which would make them more responsive to discounts and incentives. They may be less likely to visit the establishment if prices were higher, and more likely to choose an alternative dining option. Therefore, their demand for the services of the establishment is likely more elastic than customers who drive there.

Bubba's Hula Shack Bar and Bistro Has Begun Giving Customers